2021 (5) TMI 402 - HC - GST

Seeking grant of Bail - different entities were clubbed to arrive at alleged amount of tax evasion of ₹ 6.31 crores - HELD THAT - Taking into consideration the facts of the case, nature of allegations, gravity of offences, role attributed to the accused, without discussing the evidence in detail, at this stage, this Court is inclined to grant regular bail to the applicant. Taking into consideration that the applicant is in jail since 03.01.2021, investigation is over and the chargesheet is filed and that the present case is based on documentary evidence which may at best attract a punishment maximum up to 5 years, this court has decided to grant bail subject to conditions imposed - the applicant shall deposit an amount of ₹ 2,00,000/before the State Tax Officer and on depositing the aforesaid amount and producing appropriate document with regard to the depositing of the amount the applicant is ordered to be released on regular bail - application allowed.

Summary

Issues:
Application under Section 439 of the Code of Criminal Procedure for bail in connection with alleged offences under the Gujarat Goods and Services Tax Act, 2017.

Detailed Analysis:
1. Bail Application: The applicant sought bail under Section 439 of the Code of Criminal Procedure concerning an Arrest Memorandum dated 03.01.2021 for offences under Sections 132(1)(a) of the Gujarat Goods and Services Tax Act, 2017. The applicant's counsel argued that the arrest was based solely on a co-accused's statement, contending it was obtained under duress and coercion, lacking evidentiary value. The applicant was arrested without determining the liability, with the tax evasion amount of ?6.31 crores being questioned for lack of supporting details. The department combined demands from 13 entities, a practice deemed unusual in tax law.

2. Prosecution's Opposition: The Public Prosecutor opposed bail, citing the nature and gravity of the offences as grounds for denial.

3. Court's Decision: After considering the facts, allegations, and role attributed to the accused, the Court granted bail. Factors influencing the decision included the applicant's prolonged detention since 03.01.2021, the completion of the investigation with a filed chargesheet, and the reliance on documentary evidence suggesting a maximum punishment of 5 years. The Court also noted the absence of evidence tampering concerns, the quantum of tax evasion, and the applicant's willingness to deposit a specified amount.

4. Precedent Consideration: The Court referenced the Supreme Court's ruling in Sanjay Chandra Vs. Central Bureau of Investigation, (2012) 1 SCC 40, as a legal basis for its decision.

5. Bail Conditions: The Court ordered the applicant's release on bail upon depositing ?2,00,000 before the State Tax Officer, with a requirement to deposit the remaining amount within eight weeks. Failure to comply would result in automatic bail cancellation. Additional conditions included executing a personal bond, surrendering the passport, regular reporting to the police station, and not leaving Gujarat without court permission.

6. Further Directives: The Court directed the concerned authorities to release the applicant only if not required for other offences and empowered the Trial Court to modify bail conditions as necessary. The Trial Court was instructed not to be influenced by the preliminary observations made during the bail order.

7. Administrative Directions: The Registry was tasked with informing the jail and Sessions Court about the bail order, with the applicant's counsel also permitted to communicate the order through suitable electronic means.

This detailed analysis summarizes the legal judgment comprehensively, covering the issues raised, arguments presented, the Court's decision, bail conditions, precedent considerations, and administrative directives.