The Supreme Court has granted bail to the Managing Director and Chairman of Future Maker, a real estate company, in connection with a Goods and Services Tax (GST) evasion case involving Rs 54 crore. The bench, comprising Justices M.R. Shah and B.V. Nagarathna, passed the order on Wednesday, noting the lack of evidence suggesting a deliberate attempt to evade tax.
Case Background
The Directorate General of GST Intelligence (DGGI) had arrested the two directors in September last year, alleging that the company had fraudulently availed input tax credit (ITC) worth Rs 54 crore through fake invoices. The company was accused of creating shell firms to generate fake invoices and claim undue ITC benefits. The DGGI claimed that the company had not actually received the goods or services for which it claimed ITC.
Supreme Court's Observations
During the hearing, the Supreme Court observed that the allegations were based on invoices and that the investigation was still ongoing. The court noted that the directors had been in custody for over six months and that the trial was likely to take time. The bench also pointed out that there was no evidence to show that the directors had tampered with evidence or influenced witnesses.
The court directed the directors to cooperate with the investigation and appear before the investigating officer as and when required. They were also ordered to furnish a personal bond of Rs 5 lakh each and to not leave the country without prior permission.
Legal Implications
The case highlights the stringent provisions under the GST law, which allows for arrest without warrant if there is a reason to believe that a person has committed an offence involving tax evasion exceeding Rs 5 crore. The Supreme Court's decision to grant bail in this case is seen as a relief for the corporate sector, which has been grappling with increased scrutiny under the GST regime.
Legal experts have noted that the court's observation regarding the lack of evidence of deliberate evasion could set a precedent for similar cases. However, they caution that each case will be decided on its own merits.
Reactions
The company's legal team expressed satisfaction with the order, stating that it reaffirms the principle of bail being the rule and jail the exception. The DGGI has not yet commented on the development.
Future Developments
The investigation into the GST evasion case is expected to continue, with the directors now out on bail. The court has directed them to not tamper with evidence and to appear before the investigating agency as required. The next hearing in the case is scheduled for next month.
