2024 (3) TMI 1084 - DSC - GST

Seeking grant of Bail u/s 437 - tax evasion - Offence specified in clause (a) or clause (b) or clause (c) or clause (d) of subsection (1) of 132 of Central Goods and Service Tax 2017 ( the act ) - HELD THAT - The accused had given password of his official laptop to the prosecution. Thus, it reveals that investigation officer was permitted to record the statement of the accused into the Judicial custody and accordingly I.O. had recorded detailed statement of accused. Moreover, it is seen that accused has co-operated to the investigation officer, as there is no any whisper of non co-operation by I.O. during custody. Hence, the contention raised by the complainant regarding the non co-operation and abscondence of the accused is washed away. Further, it appeared that accused is taken into Judicial custody. No purpose will serve by detention of the accused behind the bar as accused is in custody since 02/03/2024. It is also observed that, investigation officer has seized official laptop, bank data and phones by panchanama. Hence there are no chances of tampering the evidence. Therefore, in view of constitutional rights and directions given in Arnesh Kumar s 2014 (7) TMI 1143 - SUPREME COURT ), it is needless to mention that, personal liberty of accused cannot be curtailed for recovery of tax or for securing presence of accused another accused. Hence, no prejudice will be caused to the complainant, if the accused is released on imposing certain strict conditions. Moreover, if the accused has not obey his undertakings, then in that case the complainant has right to move an application for cancellation of bail for disobeying the undertaking as well as conditions. Hence, no prejudice will be caused to the complainant, if the accused person is enlarged on imposing conditions. The apprehension raised by the prosecution can be safeguarded by imposing stringent conditions. Thus, the gravity of offence leveled against the accused and other mitigating circumstances along with medical condition of present accused, the apprehension of prosecution in respect of absconding or tampering of evidence, imposing conditions will suffice purpose. Hence, accused Prateek Patel be released on bail on terms and conditions.

Issues Involved:
1. Legality of Arrest
2. Prima Facie Case
3. Compliance with Procedural Requirements
4. Medical Condition of the Accused
5. Risk of Tampering with Evidence
6. Bail Conditions

Summary:

1. Legality of Arrest:
The accused argued that the arrest was not conducted as per the due procedure of law. It was contended that the accused did not commit any alleged offence and was merely an employee receiving a declared salary and perks, without any involvement in GST return filings or supply of services by the company. The arrest memo was claimed to be erroneous and not in compliance with legal provisions.

2. Prima Facie Case:
The advocate for the accused submitted that the reasons in the remand application were vague and a prima facie case was not made out. The accused had cooperated with the investigation, and his statement was recorded. The prosecution had not conducted a special audit of the company nor followed mandatory prerequisites of arrest as per section 69 of the CGST Act read with section 167 of Cr.P.C. and section 132 of the Act.

3. Compliance with Procedural Requirements:
The accused argued that the prosecution did not issue a show cause notice or intimate the statement of ascertainment of tax. The directions of the Hon'ble Apex Court in Arnesh Kumar V/s State of Bihar and Satendra Kumar Antil V/s CBI were not followed by the prosecution. The accused emphasized that bail is a rule and jail is an exception, and he would comply with all conditions imposed.

4. Medical Condition of the Accused:
The accused highlighted his adverse medical condition, having undergone surgery in December 2023 and subsequent hospitalization. The medical reports indicated the need for regular medication, follow-up, and rest, which was not considered by the prosecution.

5. Risk of Tampering with Evidence:
The prosecution opposed the bail, arguing that the accused, a qualified chartered accountant and Head of Finance, was directly involved in the offence and had a substantial role in the company's business transactions. The prosecution feared that the accused might tamper with evidence or abscond if released on bail. The accused had disclosed the names of other co-accused and shared his laptop password during the investigation.

6. Bail Conditions:
The court noted that the accused had been in custody since 01/03/2024 and had cooperated with the investigation. The court emphasized that personal liberty cannot be curtailed for tax recovery or securing the presence of another accused. The court decided to release the accused on bail with stringent conditions to prevent any prejudice to the prosecution.

Order:
1. The accused Prateek Patel is to be released on bail on furnishing PB and SB of Rs.15,00,000/- with one or two solvent sureties.
2. Provisionally released on cash bail of Rs.2,00,000/- for ten days.
3. Furnish proof of residence.
4. Permission required for travel outside Gujarat and Maharashtra.
5. Not to tamper with evidence or pressurize witnesses.
6. Furnish verified photo identity and residence proof.
7. Attend complainant's office every Tuesday and Saturday till chargesheet filing.
8. Attend complainant's office as required.
9. Provide mobile number and address proof in case of residence change.
10. Produce photographs, mobile number, and address proof of himself, his sureties, and two blood relatives.
11. Breach of conditions will be a ground for bail cancellation.
12. Intimate the order to the Investigation Officer for further procedure.

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