Bail Was Procured By Misrepresentation: Uttarakhand HC Upholds Cancellation Of Bail Of Accused In Timber Trade Scam

The accused was previously released on bail in connection with a case involving the alleged issuance and sale of fake invoices of timber to different buyers within the State as well as outside the State on commission basis without causing actual supply of goods, causing loss of revenue of Uttarakhand Goods and Services Tax and Central Goods and Services Tax to the State Government as well as to the Government of India.

A Single Bench of Justice Rakesh Thapliyal observed, “Such a conduct of the applicant, seeking regular bail without disclosing the material facts, about the criminal history and the facts about his conviction clearly reveals that he procured the bail by way misrepresentation and in such an eventuality, the same Court was right in cancelling the bail.”

Advocate Lalit Sharma appeared for the applicant, while AGA G.S. Sandhu represented the respondents.

The Deputy Commissioner, Special Investigation Branch (GST-State) had filed a complaint against the accused involved allegations of tax fraud. The complaint detailed the operation of numerous shell firms by the accused using fraudulent identities and documents. These firms were implicated in the issuance of fake invoices for 'wood swan' and 'timber', facilitating the fraudulent availing of the Input Tax Credit (ITC) and causing revenue losses to both the state and central governments.

The accused was initially arrested and later released on bail. However, this bail was challenged by the State Tax Department on grounds including the accused’s past criminal history, which he failed to disclose during his bail application process. The trial court noted that the accused’s criminal background, including a previous conviction for similar tax evasion offences, was an oversight. Consequently, the bail was revoked

The High Court stated that the accused had made all possible efforts to procure the bail by misrepresenting and suppressing material facts.

“Now-a-days, the economic offences are serious in nature. Since there are serious allegations against the applicant/accused, therefore, in the opinion of this Court, the Court of District and Sessions Judge, Udham Singh Nagar, rightly touched also the merit of the case to examine the seriousness of the allegation. Therefore, this Court is of the view that there is no any illegality in the order under challenge, particularly when the applicant suppressed the material facts,” the Court remarked.

Consequently, the Court held, “The argument as advanced by the learned counsel for the applicant that the learned Sessions Judge was wrong in cancelling the bail and the same is barred by Section 362 of CrPC, is not acceptable, keeping in view of the seriousness of the allegation.”

Accordingly, the High Court dismissed the application.

Cause Title: Mohd. Shahnawaz Hussain v. State of Uttarakhand & Anr.

Appearance:

Applicant: Advocate Lalit Sharma

Respondents: AGA G.S. Sandhu and Bhaskar Chandra Joshi

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