2018 (7) TMI 1293 - HC - Service Tax

Release on Bail - non-deposit of amount which company had collected from the customers as service tax - Held that - Considering the nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence, reasonable apprehension of tampering with the witnesses and prima facie satisfaction of the Court in support of the charge, the applicant is entitled to be released on bail in this case. Applicant is allowed to be released on bail subject to conditions imposed.

Summary

Issues: Bail application for alleged service tax evasion.

Nature of Accusation and Severity of Punishment:
The applicant, an ex-director of a company accused of collecting a significant amount from flat buyers without the necessary infrastructure, faces allegations of not depositing service tax collected from customers. The defense argues that the applicant was falsely implicated with no criminal history and is willing to cooperate. The opposing party contends that the offense is serious due to willful default causing a substantial loss to the government exchequer. The court considers the severity of the offense, the potential punishment upon conviction, and the supporting evidence. Despite acknowledging the seriousness of the accusation, the court finds the applicant entitled to bail.

Reasonable Apprehension of Tampering and Prima Facie Satisfaction:
The court notes the reasonable apprehension of tampering with witnesses and prima facie satisfaction regarding the charges. Despite not expressing an opinion on the case's merits, the court grants bail to the applicant, subject to specific conditions. The bail order includes provisions for a personal bond with sureties, a significant sum to be deposited by the applicant's company, and strict adherence to conditions during the bail period.

Bail Conditions and Directions:
The court orders the release of the applicant on bail, requiring him to attend and cooperate in the trial, refrain from tampering with witnesses, and avoid engaging in illegal activities during the bail period. Additionally, the applicant's company is directed to deposit a substantial sum to the concerned department within three months of the applicant's release. The court emphasizes the verification of sureties' identity, status, and residence by the authorities. Breach of any bail conditions empowers the trial court to cancel the bail, ensuring compliance with the directives set forth.