2024 (4) TMI 850 - HC - GST

Seeking cancellation of pre-arrest bail granted to the respondent - evasion of GST revenue - running fake firms and generating fake E-way bills - HELD THAT - Hon ble Apex Court in THE STATE OF GUJARAT ETC. VERSUS CHOODAMANI PARMESHWARAN IYER ANR. ETC. 2023 (7) TMI 1008 - SUPREME COURT observed that Thus, the position of law is that if any person is summoned under Section 69 of the CGST Act, 2017 for the purpose of recording of his statement, the provisions of Section 438 of Criminal Procedure Code, 1908 cannot be invoked. We say so as no First Information Report gets registered before the power of arrest under Section 69(1) of the CGST Act, 2017 is invoked and in such circumstances, the person summoned cannot invoke Section 438 of the Code of Criminal Procedure for anticipatory bail. The only way a person summoned can seek protection against the pre-trial arrest is to invoke the jurisdiction of the High Court under Article 226 of the Constitution of India. In the light of the above observation of the Hon ble Apex Court, in the present case also after the non-applicant is summoned in view of the provisions conferred by Section 69(1) of the GST Act, 2017 he approached to the Sessions Court and the Sessions Court without considering the provisions and the necessity, granted bail to the non-applicant in the event of his arrest. In view of the observation of the Hon ble Apex Court, the anticipatory bail application itself is not maintainable. Thus, the Sessions Court has ignored the provisions of law and granted bail which is contrary to the law. In view of that bail granted to the present non-applicant deserves to be cancelled. The bail granted to the present non-applicant is hereby cancelled - Application allowed.

Summary

Issues involved: Application seeking cancellation of pre-arrest bail granted to the respondent in connection with a crime under the GST Act.

Summary:

Issue 1: Grounds for seeking cancellation of bail
The applicant, an investigating authority under the GST Act, alleges that the non-applicant is involved in fraudulent activities related to GST evasion. The applicant contends that the bail granted by the Sessions Court did not consider the necessity of custodial interrogation and argues that the non-applicant should have filed a petition under Article 226 of the Constitution of India instead of seeking anticipatory bail.

Issue 2: Non-applicant's response
The non-applicant expressed unwillingness to pursue proceedings under Article 226 of the Constitution of India.

Issue 3: Legal precedent
The judgment refers to a decision of the Honorable Apex Court stating that when a person is summoned under Section 69 of the CGST Act for recording a statement, Section 438 of the Criminal Procedure Code cannot be invoked. The only recourse for protection against pre-trial arrest is to approach the High Court under Article 226 of the Constitution of India.

Judgment:
In light of the legal precedent, the High Court finds that the anticipatory bail application was not maintainable. The Sessions Court's decision to grant bail without considering the legal provisions was deemed contrary to the law. Consequently, the bail granted to the non-applicant is cancelled, and the non-applicant is directed to surrender for investigation purposes.

The application seeking cancellation of pre-arrest bail is allowed, and the non-applicant is ordered to surrender for investigation.