ORDER : 1. The matter comes upon for hearing on the application for cancellation of bail filed under Section 439(2) of Cr.P.C. as the Hon’ble Apex Court in Criminal Appeal No.316/2024 (arising out of SLP (Crl) No.10864/2024), directed this Court to provide reasonable opportunity to both the parties for advancing their arguments on the application filed under Section 439 (2) of the Cr.P.C.. The Hon’ble Apex Court also directed the counsel for the respondent to present on the next date and not to procrastinate the matter again. The matter was listed and heard on 26.11.2024. 2. The petitioner-Union of India has filed the present Criminal Misc. Cancellation Bail Application under Section 439 (2) of Cr.P.C., against the order dated 03.11.2023, passed by the learned Additional Sessions Judge No.2, Jaipur Metropolitan-II, whereby the Bail Application No.179/2022 under Section 132 (1) (c) and (f) of Central Goods and Services Tax Act, 2017 (from now on referred to as ‘CGST Act’) was allowed. 3. It is vehemently argued by learned counsel for the petitioner that the court below committed an error while granting bail to the present respondent-Gautam Garg. The learned Court below has observed that the statement of respondent-Gautam Garg was not recorded under normal circumstances; there was no evidence that Gautam Garg is a Manager in Firm M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai & Sons and M/s Gurbax Rai Praveen Kumar. No electronic evidence was found on the residential premises of Gautam Garg; the department could not produce the reasons for believing in the arrest memo of Gautam Garg. The State Goods and Services Tax Department of Rajasthan has issued a summons to Gautam Garg. Two proceedings cannot run simultaneously. Lastly, the evasion of Goods and Services Tax (from now on referred to as ‘GST’) is only Rs.7.48 crores. After relying upon the judgment of Hon’ble Allahabad High Court, the Court below allowed the bail application of Gautam Garg. 4. Learned counsel for the petitioner further submits that the above observations in the bail application are contrary to facts. Lastly, the evasion of Goods and Services Tax (from now on referred to as ‘GST’) is only Rs.7.48 crores. After relying upon the judgment of Hon’ble Allahabad High Court, the Court below allowed the bail application of Gautam Garg. 4. Learned counsel for the petitioner further submits that the above observations in the bail application are contrary to facts. Learned counsel for the petitioner submits that respondent Gautam Garg, in his statement recorded under Section 70 of the CGST Act, has clearly stated that he and his uncle Lovkesh Kumar collected fake bills from fake and non-existent firms based in Sirsa Haryana without supplying any goods for the three companies namely; M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Parveen Kumar. The facts also disclose that in a search conducted by the Department, Rs.4.00 lacs were found in the residence of respondent Gautam Garg. 5. Apart from the evidence of petitioner under Section 70 of the CGST Act, pre-signed chequebooks, weighbridge receipts, details of jeans brokers, purchase invoices and raw slips related to the firm M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Parveen Kumar were also recovered from the residence of Gautam Garg and Lovkesh Kumar. Further, two WhatsApp groups were found on the mobile of Gautam Garg, in which Gautam Garg and Lovkesh Kumar were members, and evidence of GST evasion by the said firms was found in the said WhatsApp group. The search was conducted under Section 67(2) of CGST Act. 6. Further, Gautam Garg in his statement, has also stated that recovered cash is related to the business activity of M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Praveen Kumar. The respondent also made available the cash books to the said firms. In the statement, respondent Gautam Garg has also stated that firms, namely M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Praveen Kumar did not receive any goods, and only the bills received from the firms are from the fake firms. In the search operation, many documents and electronic evidence related to the firms were found in Gautam Garg’s residence and mobile phone. In the search operation, many documents and electronic evidence related to the firms were found in Gautam Garg’s residence and mobile phone. Learned counsel further submits that as per amended Section 132 of CGST Act, whoever commits or causes to commit and retain the benefits arising out of any supplies, any goods or both, without issue of any invoice in violation of provisions of CGST Act or the rules made thereunder, to evade tax and issues any invoice or bill without supplying the goods or avails Input Tax Credit (from now on referred to as ‘ITC’) using such invoices or bills referred to in Clause B or fraudulently availing ITC without any invoice or bill is punishable by up to five years with a fine, and the offences cognizable and non-bailable. The learned trial Court wrongly observed that there was no evidence that Gautam Garg has issued or received good-less invoices on behalf of M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Praveen Kumar. As per amended Section 132 of the CGST Act, any person who causes to commit and retain the benefits arising out of fraudulently availing ITC without any invoice or bill is responsible and can be prosecuted under Section 132 of the CGST Act. There was enough material on the record to show that respondent Gautam Garg committed and retained the benefits arising from issuing bills without receiving goods and fraudulently availing ITC on behalf of the three companies. The petitioner didn’t need to show that petitioner was appointed as Manager of the three companies or was engaged in the business of the company. Therefore, the learned trial Court erred in observing that no evidence available against the petitioner regarding committing a crime under the CGST Act. 7. Learned counsel for the petitioner further vehemently submits that statement under Section 70 of the CGST Act is admissible in evidence that can be used against the person who has rendered such evidence. Learned counsel further submits that after the entire investigation, it was found that respondent Gautam Garg had wrongly availed ITC amounting to Rs.8.59 crores based on fake bills without supplying goods/services. The respondent, Gautam Garg, has collected fake bills from fake and non-existent firms. Therefore, enlarging the petitioner on regular bail was wrong. He further argues that as per judgment of P.V. Ramana Reddy Vs. Union of India & Ors. The respondent, Gautam Garg, has collected fake bills from fake and non-existent firms. Therefore, enlarging the petitioner on regular bail was wrong. He further argues that as per judgment of P.V. Ramana Reddy Vs. Union of India & Ors. In WP No.4764/2019 passed by Hon’ble High Court for the State of Telangana dated 18.04.2019, the discretion was made between the provisions enshrined under Section 41(A)(3) of Cr.P.C. The Telangana High Court held that if reasons to believe are recorded in the file, it is unnecessary to record those provisions in the authorization for arrest under Section 69(1) of the CGST Act. The vocabulary used under Section 69(1) of the CGST Act, 2017 “reasons to believe” is not contrary to the words reasons to be recorded appearing in Section 41(A)(3) Cr.P.C. Therefore, the Department didn’t need to disclose the reasons for authorizing the arrest. The learned trial Court, while relying upon the judgment of Narendra Rathi Vs. Senior Intelligence Officer dated 16.03.2023 misconstrued the provisions of Section 19 of Prevention of Money Laundering Act (from now ons referred to as ‘PMLA’) with Section 69 of CGST Act, 2017. He further submits that judgment of the Hon’ble Telangana High Court was challenged before the Hon’ble Apex Court and Hon’ble Apex Court vide judgment dated 27.05.2019 dismissed the Special Leave to Appeal preferred by P.V. Ramana Reddy; therefore, enlarging the respondent on bail was incorrect. Learned counsel for the petitioner further submits that in a catena of judgments, the Hon’ble Apex Court has reiterated that economic offences are class apart and not to be visited with a different approach in the matter of bail. In the matter of Y. S. Jagmohan Reddy Vs. Central Bureau of Investigation Criminal Appeal No.730/2013, the Hon’ble Apex Court categorically held that while granting bail, the Court has to keep in mind the nature of the accusation, the nature of evidence and support thereof, the severity of the punishment with a conviction which entirely the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial reasonable apprehension of the witnesses being tampered with the more significant interest of public/State and other similar occasions, therefore, in the light of the above judgments, the learned trial Court has wrongly enlarged the petitioner under Section 439(2) of Cr.P.C. 8. Therefore, the application for cancelling the petitioner’s bail may be allowed, and the respondent may be directed to be taken into custody. 9. Learned counsel for the respondent justifies the order passed by the court below about granting bail to the respondent. 10. It is contended by learned counsel for the respondent that the evidence collected by the prosecution explicitly suggests that the respondent is not the Director or Proprietor of M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Praveen Kumar. It is further contended that Section 132(c) of CGST Act is applicable only for the persons who have availed input tax credit, using invoices or bill referred to in Clause (b). It is vehemently argued that the allegations against the respondent is regarding falsifying the record and generating the fake bills is also false. The respondent not being associated as Director or Manager of the company is not responsible for prosecution under Section 132(c) of the said Act. The maximum offence committed by the respondent falls within the ambit of Section 132(f), therefore, the order passed by the learned court below recording the observation that the respondent is not proprietor or manager of the aforesaid firms, is justified. It is also vehemently argued that the statement recorded under Section 70 by the concerned Authority is not relevant and cannot be used against the respondent as per Section 132(b) of the CGST Act. The statement rendered under Section 70 of the CGST Act, are admissible only when the Court deems it proper to admit the statement, therefore, the statement of the respondent recorded under Section 70 of the said Act, cannot be relied upon. 11. It is also argued that Section 132(l)(iv) enumerates that the offence specified in Clause (f) shall be punishable with imprisonment for a term which may extend to six months or with fine or with both and the said offence is bailable one. The court below after taking note of judgment passed in the case of Ashish Kakkar Vs. Union of India & Ors., rightly allowed the bail application of the respondent. It is likewise argued that under section 136 of CGST Act, the statement rendered under Section 70 of the CGST Act are not admissible, therefore, the application for seeking cancellation of bail has no merit and deserves to be dismissed. 12. Union of India & Ors., rightly allowed the bail application of the respondent. It is likewise argued that under section 136 of CGST Act, the statement rendered under Section 70 of the CGST Act are not admissible, therefore, the application for seeking cancellation of bail has no merit and deserves to be dismissed. 12. The law enunciated for cancelling the bail granted is synopsised as follows:- (i) If there are serious allegations against the accused and he has not misused the bail granted to him. In that case such an order can be revoked by the Court if the Courts below have ignored the relevant material available on record or not looked into the gravity of the offence or the impact on the society resulting in such an order. (ii) The Court can cancel bail if a change in circumstances justifies it. (iii) If the accused is arrested for committing a new offence while on bail for a previous one, this can be grounds for bail cancellation. (iv) If the accused poses a significant risk to public safety or threatens the community, the Court may cancel bail to protect society. (v) If the accused repeatedly fails to appear in Court when required, the Court may cancel bail due to his non-appearance. (vi) Courts have the authority to cancel bail if it is deemed necessary in the interests of justice. This discretion should be exercised judiciously and not arbitrarily. (vii) If the accused tries to obstruct the legal process or interferes with how justice is served. (viii) When the accused attempts to escape or avoid facing the legal consequences of his actions. (ix) If the person misuses the freedom granted to him by bail for unlawful activities. (x) If it becomes evident that the accused is planning to flee the jurisdiction to avoid prosecution, the Court may cancel his bail. (xi) If the individual uses his freedom on bail for unlawful activities, such as committing another crime or engaging in activities that undermine the legal process. (xii) If evidence suggests that the accused is attempting to intimidate or influence witnesses in the case, his bail can be cancelled. (xiii) If there is reason to believe that the accused is trying to destroy or manipulate evidence crucial to the case, this can lead to bail cancellation. (xiv) The Court granting bail disregards relevant evidence while considering irrelevant material and trivial details. (xiii) If there is reason to believe that the accused is trying to destroy or manipulate evidence crucial to the case, this can lead to bail cancellation. (xiv) The Court granting bail disregards relevant evidence while considering irrelevant material and trivial details. (xv) If bail has been granted on untenable or unsustainable grounds. (xvi) When the bail order is marred by serious flaws that result in a miscarriage of justice. On the touchstone of the above-stated tenets, the Court must analyze whether the impugned order dated 03.11.2023 granting bail needs interference. The learned Court below observed that the petitioner is entitled to bail as the memo of arrest lacks grounds for arrest. The learned Court below placed reliance upon the Judgment Hon’ble Allahabad High Court. The provisions of arrest are described explicitly under section 69 of the CGST Act below:- “Where a person is arrested under Sub-Section (1) for an offence specified under Sub-Section (5) of Section 132, the officer authorized to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty-four hours.” (xvii) If the bail order appears to be arbitrary, whimsical, or perverse given the specific facts of the case. 13. The Court also analysed that no material is available on the record to suggest that the accused petitioner, the manager of the three companies, generated fake and goodless invoices for claiming input credit tax. 14. The analysis of the Court below suffers from perversity as it is not the condition precedent for prosecuting a person under section 132 of the CGST Act. The provisions explicitly state that whoever commits or causes to commit and retain the benefits arising from any supplies, goods, or both without the issue of any invoice or without supplying the goods avails input tax credit is liable to prosecution. Thus, the absence of material indicating the accused petitioner as the manager of the three firms is not essential. The Court below did not assess the consequence and spirit of the provision under section 132 of the CGST Act. 15. The legislature purportedly amended section 132 of the CGST Act in the Finance Act, 2020 after adding the phraseology “causes to commit“ just after “Whoever commits” to take hold of the actual offender who enables the company or companies by generating fake invoices or aiding such companies in availing the input credit illegally. 15. The legislature purportedly amended section 132 of the CGST Act in the Finance Act, 2020 after adding the phraseology “causes to commit“ just after “Whoever commits” to take hold of the actual offender who enables the company or companies by generating fake invoices or aiding such companies in availing the input credit illegally. The earlier provisions lacked the provision regarding catching hold of the persons behind the curtains, enabling the companies to avail of the input credit by falsifying and manoeuvring the documents. Such unethical offenders were free from the clutches of the law-enforcing agencies. 16. Thus, the arguments raised by the respondent's counsel are misconceived and against the express provisions of section 132 of the CGST Act. The arguments that only the individuals engaged in the company's management are accountable for the prosecution are unsustainable. Likewise, the Court completely ignored the incriminating material collected against the petitioner. The factual aspects show that many documents and electronic evidence were collected and petitioner was found to be directly involved in generating the false and fabricated goodless invoices. Further, the Court below ignored the factual aspect put forth by the Department and also failed to appreciate that the respondent had wrongly availed ITC by generating fake invoices causing wrongful gain to the three companies and wrongful loss to the Government. The ITC availed by the respondent amounts to Rs.8.59 crores. While granting bail to economic offender, the Hon’ble Apex Court has reiterated that economic offences are class apart and need to be visited with different approach in the matter of bail. The Court below while considering the bail application of respondent, did not consider the gravity of the offences and enlarged the respondent on bail misconstruing the facts and the legal position. It is also pertinent to mention here that while considering the bail application, it is not desirable for the Court to enter into the question of legality of the arrest, the legality of the arrest can be questioned only if there is a gross violation of any provision of the Act. In the present case, before arresting the respondent, the respondent was duly informed regarding grounds of arrest. 17. In the present case, before arresting the respondent, the respondent was duly informed regarding grounds of arrest. 17. The other argument is that the statement recorded by the concerned authority under section 70 of the CGST could not be utilised and read at the time of enquiry or for bringing out the prima facie opinion for indulgence in the crime is likewise not conceivable as, firstly, the authority recording the statement under section 70 is not a police officer, thus not hit by section 25 of the Evidence Act; secondly, section 136 (2) of the CGST applies to the court regarding admitting the statement under section 70 of the witness or witnesses who aspired to be examined by the prosecution in the trial. 18. Thus, in view of the detailed discussion, this Court deems it appropriate to cancel the bail granted to respondent-Gautam Garg S/o Shri Rajesh Garg, the same stands cancelled. The application for cancellation of bail is allowed and the order granting bail dated 03.11.2023 passed by learned Additional Sessions Judge No.2,Jaipur Metropolitan-II is cancelled accordingly. The respondent-Gautam Garg S/o Shri Rajesh Garg shall surrender before the trial Court on or before 13.12.2024. The copy of this order shall be transmitted to the learned trial Court forthwith. The trial Court is hereby directed to issue necessary directions in this regard in order to ensure the presence of the accused before it.