2019 (3) TMI 1707 - HC - GST

Grant of anticipatory bail - offences punishable under Section 132(1)(i) read with Section 132(1)(b)(c) of Goods and Services Tax Act 2017 - alleged tax evasion to an extent of 36 crores - Whether the petitioner can be granted relief under Section 438 of Cr.P.C.? HELD THAT - It is evident from the record and the submissions made by both sides that there is apprehension of arrest of the petitioner for the non-bailable offences alleged in the subject crime. The main accused in this case is a corporate body. The financial matters are being dealt with by the Chief Financial Officer - Furthermore the petitioner is not directly or indirectly liable for the taxes imposed by the Government from time to time. There is no record to substantiate the prima facie involvement of the petitioner in the subject criminal case. The arrest and detention of the petitioner would damage his reputation. The allegations are not grave and the gravity of the offences is not so high to deny bail to the petitioner under Section 438 Cr.P.C. There are no circumstances to hold that the petitioner would indulge in tampering the records and influence the witnesses. The Chief Financial Officer of the said company was arrested and detained for about 30 days in judicial custody. In the course of investigation so far incriminating material is also collected. So the petitioner is not required for custodial investigation. Therefore the petitioner is entitled for relief under Section 438 Cr.P.C as mentioned hereunder. The respondents are directed to release the petitioner on bail in the event of his arrest on petitioner executing a personal bond for a sum of 10, 00, 000/- with two sureties in a like sum each to the satisfaction of the respondent No. 2 i.e. Senior Intelligence Officer O/o. Director General of Goods and Services Tax Intelligence Hyderabad Zonal Unit Hyderabad - petition allowed - decided in favor of petitioner.

Summary

Issues involved:
Grant of anticipatory bail under Section 438 of the Code of Criminal Procedure in connection with offences under Section 132(1)(i) read with Section 132(1)(b)(c) of the Goods and Services Tax Act, 2017.

Detailed Analysis:

1. Background and Arguments:
The petitioner, an advocate, sought anticipatory bail in connection with a case involving tax evasion under the GST Act. The respondent, a Special Public Prosecutor, alleged the petitioner's involvement in tax evasion amounting to ?36 crores without serving the required summons. The petitioner denied direct involvement with the company in question and offered to cooperate with the investigation.

2. Legal Standpoints:
The key issue for determination was whether the petitioner could be granted relief under Section 438 of Cr.P.C. The prosecutor contended the petitioner's responsibility for tax evasion without substantial evidence, while the petitioner argued against his direct involvement in the alleged offenses.

3. Legal Precedent:
Reference was made to a legal precedent (Union of India Vs. Padam Narain Aggarwal) where the court held that certain conditions imposed on bail were not in line with the law, leading to the setting aside of the bail order.

4. Court's Decision:
The court noted the absence of prima facie evidence directly linking the petitioner to the tax evasion. It was emphasized that the petitioner's arrest could hinder the investigation process, and there was no indication of his intention to abscond or tamper with evidence. The court granted anticipatory bail to the petitioner upon execution of a personal bond for ?10,00,000 with two sureties.

5. Conclusion:
The court allowed the Criminal Petition, directing the release of the petitioner on bail if arrested, subject to the specified conditions. The judgment highlighted the lack of concrete evidence against the petitioner and the potential damage to his reputation if detained. The decision aimed to balance the interests of justice with the petitioner's rights in the legal proceedings.