2020 (8) TMI 417 - HC - GST

Grant of Bail - evasion of GST - allegations against the firm M/s Vishnu Essence, while the petitioner is neither a partner nor in any other way concerned or connected with the firm - It is contended that the entire case of the respondent is based on the statement of the petitioner recorded under Section 70 of the Act, which was recorded under coercion and duress and was retracted immediately - HELD THAT - On due consideration of the allegation against the petitioner, evidence produced before the court to show his involvement, the act attributed to him, the part played by him in the alleged tax evasion, parity of his case with the case of the co-accursed persons who have been granted bail and other facts and circumstances of the case, it is deemed appropriate to allow the application. Petition allowed.

Summary

Issues Involved:
1. Parity in granting bail.
2. Allegations against the petitioner.
3. Basis of the prosecution's case.
4. Petitioner's defense and retraction of statements.
5. Health and age considerations.
6. Department's stance on bail and investigation status.
7. Legal provisions and precedents cited.
8. Bail conditions.

Issue-wise Detailed Analysis:

1. Parity in Granting Bail:
The petitioner sought bail under Section 439 of the Cr.P.C., claiming parity with co-accused Amit Bothra and Ashok Daga, who were granted bail earlier. The petitioner argued that his case was on better footing as he was neither a partner nor connected with the firm M/s Vishnu Essence, unlike the co-accused.

2. Allegations Against the Petitioner:
The petitioner was implicated in a case registered under Section 132(1)(a)(i) of the GST Act and Sections 409, 467, 471, and 120-B of the IPC. The prosecution alleged that the petitioner, as a trader, supplier, or commission agent for M/s Vishnu Essence, was involved in tax evasion related to clandestine removal and transportation of Pan Masala.

3. Basis of the Prosecution's Case:
The prosecution's case was primarily based on the petitioner's statement recorded under Section 70 of the GST Act, which the petitioner claimed was obtained under coercion and duress. The Department seized unaccounted goods worth ?2.59 crores and alleged clandestine transportation of Pan Masala.

4. Petitioner's Defense and Retraction of Statements:
The petitioner contended that he was not involved in any clandestine activities and that his statements were retracted immediately after being recorded under pressure. He argued that no documents showed procurement, receipt, or sale of goods without invoices.

5. Health and Age Considerations:
The petitioner cited his advanced age (63 years), health issues (BP and respiratory problems), and the high risk posed by the COVID-19 pandemic as additional grounds for bail.

6. Department's Stance on Bail and Investigation Status:
The Additional Solicitor General contested the petitioner's claim for parity but could not substantially distinguish the petitioner's case from that of the co-accused. The Department argued that the petitioner's release could hamper the ongoing investigation, which had already revealed significant evidence of tax evasion.

7. Legal Provisions and Precedents Cited:
The court considered various legal provisions and precedents, including Sections 69, 70, 132, 134, 136 of the GST Act, and relevant Supreme Court judgments. The Department referred to the Telangana High Court's observations in P. V. Ramana Reddy Vs. UOI and the Supreme Court's stance on economic offenses in Y. S. Jagan Mohan Reddy Vs. CBI.

8. Bail Conditions:
The court granted bail to the petitioner on the same terms as the co-accused, including furnishing a personal bond of ?5,00,000 with sureties, cooperating with the trial, not influencing witnesses, not committing any offense, submitting passports, and not leaving India without permission.

Conclusion:
The court allowed the bail application, considering the allegations, evidence, petitioner's health, and parity with co-accused. The petitioner was granted bail on specific conditions to ensure cooperation with the trial and prevent any interference with the investigation.