# M/s V.K. Traders v. U.O.I. & Ors

- **Citation:** (2022) 3 ILRA 79
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-03-08
- **Case number:** Criminal Misc. Anticipatory Bail Application U/S 438 CR.P.C. No. 19059 of 2021
- **Bench:** Samit Gopal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-v-k-traders-v-u-o-i-ors-48241
- **Pages:** 7

## Headnote

A. Criminal Law - Code of Criminal
Procedure,1973 - Section 438 - Central
Goods and Service Tax Act, 2017-Section
132(1)(a)(b)(c)(d)(i)-application-seeking
80 INDIAN LAW REPORTS ALLAHABAD SERIES
grant of bail-availment and utilisation of
ineligible Input Tax Credit (ITC) on the
basis of fake invoices issued in the name
of M/s V. K. Traders of which applicant no.
2 was the sole proprietor-the disputed
amount is an inadmissible Input Tax
Credit of Rs. 1,80,86,343/- which is much
less than 5 crore remain bailable as per
Section 132(1)(a)(b)(c)(d)(i) of the Act,
2017 -the terms of imprisonment and the
amount of fine is dependent on the
amount involved in the offence-granting
for bail does not arise for an offence which
is bailable and a direction for the same
can be issued only in respect of nonbailable and cognizable offence-Thus, the
applicant's bail deserves to be rejected.
(Para 1 to 20)

The application is rejected. (E-6)

List of Cases cited:

## Text

3 All. M/s V.K. Traders Vs. U.O.I.. & Ors.
79
the case, and subject to the discretion of the
court."

19. Anticipatory bail being an extraordinary remedy, should be resorted to only
in a special case. The case prima facie
indicates involvement of the applicant in
the offence-in-question as he was the
beneficiary by making use of the forged
mark-sheet/degree. The applicant has not
established any special circumstance. No
reason is found to falsely implicate the
present applicant.

20. It is settled principle of law that
departmental and criminal proceedings are
distinct and have different standards of
proof. The two proceedings, criminal and
departmental, are entirely different. They
operate in different fields and have
different objectives. The issue drawing
attention of the Apex Court is with regards
to the termination of the applicant. The
present First Information Report is with
regards to the filing of the forged document
being the B.Ed. mark-sheet/degree on the
basis of which employment was sought and
was given. The matter of termination and
lodging of the First Information Report /
the investigation / trial if any, are altogether
two different proceedings and are not in
any manner linked with each other.

21. By the act of the applicant of
seeking appointment on the basis of a
forged mark-sheet/degree, one deserving
candidate has lost his seat and chance of
appointment and it may be a life long loss
for many reasons like crossing the bracket
of prescribed age and many other factors.

22. After having heard learned
counsels for the parties and perusing the
records, it is evident that the first
anticipatory
bail
application
of
the
applicant was rejected on 15.06.2021 on
merits. In so far as, the orders of the other
persons are concerned who have been
granted
anticipatory
bail/interim
anticipatory bail, the same are not binding
on this Court. While rejecting the first
anticipatory bail application, the Court was
of the opinion that during investigation
even at times custodial interrogation may
be necessary to reach the roots of the crime,
the same cannot be overlooked. Therefore,
looking into the gravity of the offence,
nature of offence and the legal position
enumerated above, this Court is of the view
that the anticipatory bail application has no
merit and is liable to be rejected.

23. Accordingly, the anticipatory bail
application is rejected.
----------
(2022)03ILR A79
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 08.03.2022

BEFORE

THE HON'BLE SAMIT GOPAL, J.

Criminal Misc. Anticipatory Bail Application U/S
438 CR.P.C. No. 19059 of 2021

M/s V.K. Traders ...Applicant
Versus
U.O.I. & Ors. ...Opposite Parties

Counsel for the Applicant:
Sri Atiqur Rahman Siddiqui, Ms. Vishakha
Pande, Sri Rakes Pande

Counsel for the Opposite Parties:
Sri Krishna Agarawal, Sri Dileep Chandra
Mathur, Sri Suresh Kumar Maurya

A. Criminal Law - Code of Criminal
Procedure,1973 - Section 438 - Central
Goods and Service Tax Act, 2017-Section
132(1)(a)(b)(c)(d)(i)-application-seeking
80 INDIAN LAW REPORTS ALLAHABAD SERIES
grant of bail-availment and utilisation of
ineligible Input Tax Credit (ITC) on the
basis of fake invoices issued in the name
of M/s V. K. Traders of which applicant no.
2 was the sole proprietor-the disputed
amount is an inadmissible Input Tax
Credit of Rs. 1,80,86,343/- which is much
less than 5 crore remain bailable as per
Section 132(1)(a)(b)(c)(d)(i) of the Act,
2017 -the terms of imprisonment and the
amount of fine is dependent on the
amount involved in the offence-granting
for bail does not arise for an offence which
is bailable and a direction for the same
can be issued only in respect of nonbailable and cognizable offence-Thus, the
applicant's bail deserves to be rejected.
(Para 1 to 20)

The application is rejected. (E-6)

List of Cases cited:

1. Onkar Nath Agrawal Vs St. (1976) SCC Online
All 11: 1976 Cr.L.J. 1142(All.)

2. Joginder @ Jindi Vs St. of Har. (2008) 10 SCC
138

3. R.K. Krishna Kumar Vs St. of Assam (1998) 1
SCC 474

(Delivered by Hon'ble Samit Gopal, J.)

1. This anticipatory bail application
under Section 438 of the Code of Criminal
Procedure, 1973 ("Cr.P.C.") has been filed
by the applicants M/s V.K. Traders/
applicant No. 1 and Vipin Kumar/ applicant
No. 2 (added as an applicant in pursuance
of order dated 25.11.2021 of the court)
before
this
Court
directly
without
approaching the Sessions Judge with the
following prayer:

"It is, therefore most respectfully
prayed that this Hon'ble Court may
graciously be pleased to allow this
application and grant anticipatory bail to
the
applicant
under
Section
132(1)(a)(b)(c)(d)(i) of the Central Goods
and Service Tax Act, otherwise applicant
shall suffer irreparable loss and injury.

And/or pass such other further
order which this Hon'ble Court may deem
fit and proper in the circumstances of the
case."

2. Heard Sri Rakesh Pande, learned
Senior Advocate assisted by Ms. Vishakha
Pande, learned counsel for the applicants,
Sri
Dileep
Chandra
Mathur,
learned
counsel for the opposite party no. 3/
Directorate General, Goods and Services
Tax Intelligence, Meerut Zonal Unit,
Meerut through its Senior Intelligence
Officer,
Sri
Suresh
Kumar
Maurya,
Advocate holding brief of Sri Krishna
Agarawal, learned counsel for the opposite
party nos. 2/ Chief Commissioner, CGST,
Meerut Zone, Meerut and 4/ Assisstant
Commissioner, CGST, Meerut and perused
the material on record.

3. No one appears on behalf of the
opposite Party No.1/ Union of India.

4. Sri S.B. Maurya, learned State
counsel is also present.

5. Learned counsel for the applicants
states that he does not intend to file any
rejoinder affidavit to the counter affidavit
filed on behalf the opposite party no. 3 for
which he was granted time on 12.2.2022.

The Court thus proceeds to hear
the matter.

6. At the very outset, learned counsel
for the applicants has stated that the dispute
in the present matter relates to an amount
of Rs.1,80,86,343/- which is stated to be
3 All. M/s V.K. Traders Vs. U.O.I.. & Ors.
81
prima facie availed by M/s V.K. Traders the
applicant no. 1 as an inadmissible Input Tax
Credit (ITC). It is argued that the applicant
no. 1 is the proprietorship firm of which the
applicant no. 2 is the sole proprietor. It is
argued that since in para- 28 of the counter
affidavit it has specifically been mentioned
that all the offences in which tax evasion is
less than Rs. 5 crore remain bailable and
only most grave offences involving tax
evasion above Rs. 5 crore have been made
non-bailable and cognizable offences and,
as such, the amount in the present dispute is
much less than Rs. 5 crore, and, hence the
offences are bailable. It is argued that as
such the applicant is entitled to be granted
anticipatory bail.

7. Per contra, learned counsel appearing
for the opposite party no. 3 opposed the
prayer for anticipatory bail and argued that
the present anticipatory bail application under
Section 438 Cr.P.C. is not maintainable
inasmuch as the amount involved, which has
been availed by M/s V.K. Traders the
applicant no. 1 and is an inadmissible Input
Tax Credit is Rs.1,80,86,343/- which is much
less than the amount which would make the
offence non - bailable and cognizable.

8. This Court without going into the
merits of the case proceeds to examine the
following question which arises before it for
its adjudication :

"Whether an application under
Section 438 Cr.P.C. would lie and is
maintainable for an offence which has been
declared by the concerned statute as a
bailable offence ? "

9. Section 438 of the Code of Criminal
Procedure, 1973 as introduced in the State of
Uttar Pradesh on 06.06.2019 reads as follows
:-

"438. Direction for grant of bail
to person apprehending arrest. -

(1) Where any person has reason
to believe that he may be arrested on
accusation of having committed a nonbailable offence, he may apply to the High
Court or the Court of Session for a
direction under this section that in the event
of such arrest he shall be released on bail;
and that Court may, after taking into
consideration, inter alia, the following
factors, namely:--

(i) the nature and gravity of the
accusation;

(ii)
the
antecedents
of
the
applicant including the fact as to whether
he has previously undergone imprisonment
on conviction by a Court in respect of any
cognizable offence;

(iii)
the
possibility
of
the
applicant to flee from justice; and

(iv) where the accusation has
been made with the object of injuring or
humiliating the applicant by having him so
arrested;

either
reject
the
application
forthwith or issue an interim order for the
grant of anticipatory bail:

Provided that where the High
Court or, as the case may be, the Court of
Session, has not passed any interim order
under this sub-section or has rejected the
application for grant of anticipatory bail, it
shall be open to an officer in-charge of a
police station to arrest, without warrant, the
applicant on the basis of the accusation
apprehended in such application.

(2) Where the High Court or, as
the case may be, the Court of Session,
considers it expedient to issue an interim
order to grant anticipatory bail under subsection (1), the Court shall indicate therein
the date, on which the application for grant
of anticipatory bail shall be finally heard
for passing an order thereon, as the Court
82 INDIAN LAW REPORTS ALLAHABAD SERIES
may deem fit, and if the Court passes any
order granting anticipatory bail, such order
shall include inter alia the following
conditions, namely:--

(i) that the applicant shall make
himself available for interrogation by a
police officer as and when required;

(ii) that the applicant shall not,
directly
or
indirectly,
make
any
inducement, threat or promise to any
person acquainted with the facts of the case
so as to dissuade him from disclosing such
facts to the Court or to any police officer;

(iii) that the applicant shall not
leave India without the previous permission
of the Court; and

(iv) such other conditions as may
be imposed under sub - section (3) of
section 437, as if the bail were granted
under that section.

Explanation: The final order
made on an application for direction under
sub - section (1); shall not be construed as
an interlocutory order for the purpose of
this Code.

(3) Where the Court grants an
interim order under sub - section (l), it shall
forthwith cause a notice being not less than
seven days notice, together with a copy of
such order to be served on the Public
Prosecutor and the Superintendent of
Police, with a view to give the Public
Prosecutor a reasonable opportunity of
being heard when the application shall be
finally heard by the Court.

(4) On the date indicated in the
interim order under sub - section (2), the
Court shall hear the Public Prosecutor and
the applicant and after due consideration of
their contentions, it may either confirm,
modify or cancel the interim order.

(5) The High Court or the Court
of Session, as the case may be, shall finally
dispose of an application for grant of
anticipatory bail under sub-section (l),
within thirty days of the date of such
application.

(6) Provisions of this section shall
not be applicable,--

(a) to the offences arising out of, -
-

(i)
the
Unlawful
Activities
(Prevention) Act, 1967;

(ii) the Narcotic Drugs and
Psychotropic Substances Act, 1985;

(iii) the Official Secret Act, 1923;

(iv) the Uttar Pradesh Gangsters
and Anti Social Activities (Prevention) Act,
1986.

(b) in the offences, in which death
sentence can be awarded.

(7) If an application under this
section has been made by any person to the
High Court, no application by the same
person shall be entertained by the Court of
Session."

10. The provision of anticipatory bail
as per its scheme can be invoked by a
person who has a "reason to believe that he
may be arrested" for committing a "non -
bailable offence".

11. For entertaining an application
under Section 438 Cr.P.C., there are two
requirements as contemplated in its Clause
(1), which are as follows:

(i) There must be an accusation of
the petitioner having committed a nonbailable offence. Obviously, this accusation
must be an existing one or in any case
stemming from the facts already in
existence.

(ii) There must be reasonable
apprehension or belief in the mind of the
petitioner that he would be arrested on the
basis of such an accusation.

The simultaneous existence of
both these conditions is a sine qua non for
3 All. M/s V.K. Traders Vs. U.O.I.. & Ors.
83
invoking courts jurisdiction. When the said
two requirements are fulfilled, the High
Court or the Court of Sessions could
entertain an application for anticipatory bail
and then consider it on its own merit.

12. In the case Onkar Nath Agrawal
v. State : 1976 SCC OnLine All 11 : 1976
Cr. L.J. 1142 (All.) it was held that the
power under section 438 Cr.P.C. is not to be
exercised in vacuum but only on the
satisfaction of the conditions spelled out in
the section itself. The court further held in
following terms:

5. It is obvious that the provision
comprises of two parts. The first part
envisages of the conditions under which a
person is entitled to make an application for
anticipatory bail in the court of Sessions or
in the High Court. There are only two
conditions which must exist before he can
move such an application. In the first place
there must exist a ground to believe that he
may be arrested and secondly there must be
an accusation of his having committed a
non-bailable offence. The language is plain
and unambiguous......."

13. In the case of Joginder @ Jindi
vs. State of Haryana : (2008) 10 SCC 138
the Apex Court has also held that Section
438 Cr.P.C. relates to non - bailable
offences and a petition under Section 438
Cr.P.C. in relation to bailable offences is
misconceived.

14. In the case of R. K. Krishna
Kumar Vs. State of Assam : (1998) 1
SCC 474 it has been held by the Apex
Court that anticipatory bail cannot be
granted in offences which are bailable.

15. It is thus concluded that the
conditions prerequisite for the court's
exercise of its discretion under Section 438
Cr.P.C. is that the person seeking such
relief must have a reasonable apprehension
of his arrest on an accusation of having
committed a non-bailable offence.

16. The question thus gets answered
by the above mentioned discussion that an
application under Section 438 Cr.P.C. is
only maintainable by a person who has
apprehension of his arrest on accusation of
having committed a non - bailable offence.

17. Section 132 of The Central Goods
and Services Tax Act, 2017 (hereinafter
referred as the 'Act') is as follows:

"Section 132 : Punishment for
certain offences

(1) Whoever commits,or causes
to commit and retain the benefits arising
out of, any of the following offences,
namely:-

(a) supplies any goods or services
or both without issue of any invoice, in
violation of the provisions of this Act or the
rules made thereunder, with the intention to
evade tax;

(b) issues any invoice or bill
without supply of goods or services or both
in violation of the provisions of this Act, or
the rules made thereunder leading to
wrongful availment or utilisation of input
tax credit or refund of tax;

(c) avails input tax credit using
the invoice or bill referred to in clause (b)
or fraudulently avails input tax credit
without any invoice or bill;

(d) collects any amount as tax but
fails to pay the same to the Government
beyond a period of three months from the
date on which such payment becomes due;

(e) evades tax, or fraudulently
obtains refund and where such offence is
not covered under clauses (a) to (d);
84 INDIAN LAW REPORTS ALLAHABAD SERIES

(f)
falsifies
or
substitutes
financial records or produces fake accounts
or documents or furnishes any false
information with an intention to evade
payment of tax due under this Act;

(g) obstructs or prevents any
officer in the discharge of his duties under
this Act;

(h) acquires possession of, or in
any
way
concerns
himself
in
transporting,removing, depositing, keeping,
concealing, supplying, or purchasing or in
any other manner deals with, any goods
which he knows or has reasons to believe are
liable to confiscation under this Act or the
rules made thereunder;

(i) receives or is in any way
concerned with the supply of, or in any other
manner deals with any supply of services
which he knows or has reasons to believe are
in contravention of any provisions of this Act
or the rules made thereunder;

(j) tampers with or destroys any
material evidence or documents;

(k) fails to supply any information
which he is required to supply under this Act
or the rules made thereunder or (unless with a
reasonable belief, the burden of proving
which shall be upon him, that the information
supplied by him is true) supplies false
information; or

(l) attempts to commit, or abets the
commission of any of the offences mentioned
in clauses (a) to (k) of this section,

shall be punishable -

(i) in cases where the amount of
tax evaded or the amount of input tax credit
wrongly availed or utilised or the amount
of refund wrongly taken exceeds five
hundred lakh rupees, with imprisonment
for a term which may extend to five years
and with fine;

(ii) in cases where the amount of
tax evaded or the amount of input tax credit
wrongly availed or utilised or the amount
of refund wrongly taken exceeds two
hundred lakh rupees but does not exceed
five
hundred
lakh
rupees,
with
imprisonment for a term which may extend
to three years and with fine;

(iii) in the case of any other
offence where the amount of tax evaded or
the amount of input tax credit wrongly
availed or utilised or the amount of refund
wrongly taken exceeds one hundred lakh
rupees but does not exceed two hundred
lakh rupees, with imprisonment for a term
which may extend to one year and with
fine;

(iv) in cases where he commits or
abets the commission of an offence
specified in clause (f) or clause (g) or
clause (j), he shall be punishable with
imprisonment for a term which may extend
to six months or with fine or with both.

(2) Where any person convicted
of an offence under this section is again
convicted of an offence under this section,
then, he shall be punishable for the second
and for every subsequent offence with
imprisonment for a term which may extend
to five years and with fine.

(3) The imprisonment referred to
in clauses (i), (ii) and (iii) of sub-section (1)
and sub-section (2) shall, in the absence of
special and adequate reasons to the
contrary to be recorded in the judgment of
the Court, be for a term not less than six
months.

(4)
Notwithstanding
anything
contained
in
the
Code
of
Criminal
Procedure, 1973 (2 of 1974), all offences
under this Act, except the offences referred
to in sub-section (5) shall be noncognizable and bailable.

(5) The offences specified in
clause (a) or clause (b) or clause (c) or
clause (d) of sub-section (1) and punishable
under clause (i) of that sub-section shall be
cognizable and non-bailable.
3 All. Najim Hussain Vs. State of U.P.
85

(6) A person shall not be
prosecuted for any offence under this
section except with the previous sanction of
the Commissioner."

18. Section 132 of the Act lists 12
offences
that
are
punishable
with
imprisonment and/or a fine. The terms of
imprisonment and the amount of fine, is
dependent on the amount involved in the
offence, or in some cases, the act
committed by the offender. The provision
further categorises certain offences as
cognizable
and non-bailable,
if
the
amount involved exceeds Rs. 500 lakhs,
as stated in clause-5 of the Section. These
offences relate to person who supply
goods
or
services
without
issuing
invoices,
or
issue
invoices
without
supplying goods or services and thus
wrongfully avail Input Tax Credit, or to
persons who collect tax but fails to pay it
to the Government beyond a period of
three months from the date on which
payment becomes due. All other offences
listed
under
the
Act
have
been
categorized
as
non-cognizable
and
bailable, as per clause-4 of the Section.

19. In the present case, it is a common
ground between the applicants and the
opposite party No. 3 that the offences are
bailable. Even para-28 of the counter
affidavit
to
the
said
effect
stands
unrebutted.

20. Resultantly, the question thus
being answered by holding that granting of
anticipatory bail does not arise for an
offence which is bailable and a direction
for the same can be issued only in respect
of non-bailable and cognizable offences,
the present anticipatory bail application
deserves rejection and, accordingly, it is
rejected.

21. Interim order dated 2.3.2022 is
hereby vacated.
----------
(2022)03ILR A85
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 06.01.2022

BEFORE

THE HON'BLE RAHUL CHATURVEDI, J.

Criminal Misc. Bail Application No. 46047 of
2021
&
Criminal Misc. Bail Application No. 44992 of
2021

Najim Hussain ...Applicant
Versus
State of U.P. ...Opposite Party

Counsel for the Applicant:
Sri Ved Prakash Mishra, Sri Jai Shanker
Malviya

Counsel for the Opposite Party:
A.G.A., Sri Janardan Prasad Tripathi

A. Criminal Law - Code of Criminal
Procedure,1973 - Section 439 - Indian
Penal Code, 1860 - Section 306-seeking
for bail-delay in FIR-husband committed
suicide on
account
of
extra
marital
relationship of his wife with other personas per doctor opinion, deceased died on
account of asphyxia as a result of
hanging-husband
committed
suicide
under the score that he was under the
constant threat and quarrelling terms with
his wife-he seems too sensitive and
possessive about his wife, he has many
other avenues and alternatives to get rid
off her instead of taking his own life-
Extra-marital relationship per se, would
not come within the ambit of Section 498A-suspicion in the mind of husband cannot
be
regarded
as
mental
cruelty-Extra
marital
realtionship
alone
is
neither
cruelty nor abetment of suicide in the
absence of proper proof for provocation-