2018 (9) TMI 835 - HC - Service Tax

Bail application - amount of service tax collected from customers not paid to Revenue - 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 - application allowed.

Summary

Issues involved: Bail application in a case involving non-deposit of service tax collected by a company, false implication of the applicant, severity of the offense, and conditions for granting bail.

Detailed Analysis:

1. Allegation of Non-deposit of Service Tax:
The applicant, an ex-director of a company, was accused of not depositing service tax collected from flat buyers, causing a loss to the government exchequer. The counsel for the applicant argued that the company had deposited a significant amount of service tax post the arrest, highlighting the alleged false implication and lack of criminal history of the applicant.

2. Opposition to Bail by Contesting Opposite Party:
The contesting opposite party vehemently opposed the bail plea, emphasizing the seriousness of the offense due to the willful default in not depositing the collected service tax, leading to a substantial loss to the government exchequer. The severity of the offense and the potential tampering with witnesses were key points raised against granting bail.

3. Court's Decision on Bail:
The court considered the nature of the accusation, severity of punishment upon conviction, supporting evidence, potential tampering with witnesses, and prima facie satisfaction with the charges. Despite not expressing an opinion on the case's merits, the court granted bail to the applicant, Atul Vikram Singh, in Case Crime No. 1 of 2018 under Section 89(1)(2) of the Finance Act, 1994, subject to specific conditions.

4. Conditions for Bail:
The court directed the release of the applicant on bail upon furnishing a personal bond with two sureties and an additional deposit by the applicant's company to the concerned department within a specified timeframe. The conditions included the applicant's cooperation in the trial, non-tampering with witnesses, and refraining from illegal activities during the bail period. Verification of sureties' identity, status, and residence was mandated, with a provision for bail cancellation in case of breaching any conditions.

In conclusion, the judgment by the Allahabad High Court granted bail to the applicant in a case involving non-deposit of service tax, emphasizing the seriousness of the offense, potential tampering with witnesses, and specific conditions to ensure compliance and trial cooperation.