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2021 (4) TMI 556 - HC - GSTSeeking grant of Bail - vicarious liability - proper investigation and enquiry was made by the officials of the GST Department before arrest or not - evasion of GST - HELD THAT - As the evasion of the duty is more than ₹ 5 crores, therefore, the offence alleged against the applicant is cognizable and nonbailable. In view of sub-section (1) of Section 138 of CGST Act, 2017 any offence under CGST Act, 2017 is compoundable, both before or after the institution of the prosecution - In the present case, no effort is made on behalf of the applicant to compound the offence either before the institution of the prosecution or at post prosecution stage. The offence alleged against the applicant is economic offence in which the evasion of duty amounting ₹ 62,10,28,165/- is made against the applicant. Although the offence is punishable with imprisonment of five years yet the evasion of huge amount of duty is a great loss to the Government Exchequer. As such the alleged offence is economic - The Hon'ble Apex Court in Y.S. JAGAN MOHAN REDDY VERSUS CENTRAL BUREAU OF INVESTIGATION 2013 (5) TMI 896 - SUPREME COURT held that the economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. Bail application dismissed.
Issues:
Bail application under Sections 132(1)(1) and 132(1)(b) r/w 132(1)(i) of CGST Act, P.S.- CGST Noida, District- Meerut. Analysis: 1. Bail Application: The accused-applicant sought bail, claiming innocence and false implication. The applicant, a firm's proprietor, argued against vicarious liability, stating only a duty of about &8377; 3.85 crores was due, excluding certain figures. The arrest lacked proper assessment and hearing opportunity, and the applicant cooperated with the investigation. The applicant's firm had admitted duty of &8377; 3.53 crores, with other concerns sharing suppliers and transporters, questioning attributing all documents to the applicant. 2. Opposition to Bail: The Union of India opposed bail, citing proper investigation and compliance with CGST Act provisions. The applicant, as the firm's proprietor, was accused of evading duties exceeding &8377; 5 crores. The offence under Section 132(1)(a) to (h) of CGST Act, 2017 was highlighted, emphasizing the gravity of the economic offence and loss to the Government Exchequer. 3. Legal Provisions: Section 69(1) of CGST Act, 2017 empowers arrest for specified offences, including cognizable and non-bailable ones. The prosecution can proceed irrespective of assessment completion, focusing on violations like issuance of invoices without supply of goods or service tax. The compoundability of offences under CGST Act, 2017 was discussed, emphasizing the liability under Section 137. 4. Vicarious Liability: The applicant's vicarious liability was debated, referencing legal requirements and factual responsibilities. The applicant's role as the firm's proprietor and responsibility for business conduct were emphasized, rejecting the argument against vicarious liability. 5. Bail Considerations: Various case laws were cited to determine bail, considering factors like gravity of the offence, severity of punishment, and the balance between individual liberty and societal interests. The economic nature of the alleged offence, with a significant duty evasion, was highlighted, leading to the rejection of the bail application. 6. Judicial Principles: The court referred to principles from previous cases regarding bail grant, emphasizing the need for judicious exercise of discretion and reasons for granting bail. Economic offences were viewed seriously, impacting the national economy, warranting a different approach in bail considerations. 7. Conclusion: After considering submissions and the case record, the court, without delving into the case's merits, deemed it unfit for bail, ultimately rejecting the bail application of the applicant-Smt. Chhaya Devi.
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