2024 (5) TMI 607 - HC - GST

Seeking grant of bail - Illegal arrest or not - blocking of the Input Tax Credit - detention for more than 24 hours - HELD THAT - The petitioner appears to have been detained for more than 24 hours. Prima facie, the justification given by the respondent No. 2 explaining the detention of the petitioner, does not appear to reason, considering the conflicting stand taken by the respondent No. 2 in their affidavit filed in this Court and their reply filed before the trial Court. It is also pertinent to note that the GST investigation of the Company was done, sometime in 2021 and that the petitioner had appeared before the authorities on behalf of the said Company. It also appears that a full-fledged inquiry was done in 2021 and the authorities had audited the accounts of the years 2017 to 2020. The time span mentioned by the respondent Nos. 1 to 3 for generating the GST returns and getting the Dowment Identification Number (DIN), prima facie appears to be an eyewash and appears to have been done to show, that the petitioner was produced within 24 hours. There was no reason for the respondent No. 2 to keep the petitioner overnight, when he came on 13th March 2023, more particularly, if the respondent No. 2 did not have documents to question the petitioner. It is not as if, the petitioner had not cooperated with the authorities and as such, it was well within the powers of the respondent No. 2 to call him on some other day or even on the next day - Arrest is a serious matter and cannot be made in a routine manner on a mere allegation of commission of an offence, inasmuch as, an arrest can cause incalculable harm to the reputation and self esteem of a person. It is deemed appropriate to grant interim bail to the petitioner, pending the hearing and final disposal of the aforesaid petition, on the terms and conditions imposed - it is ordered that the petitioner be released on cash bail in the sum of Rs. 25,000/-, for a period of six weeks - petitioner shall within the said period of six weeks, furnish P.R. Bond in the sum of Rs. 25,000/- with one or two sureties in the like amount. Petition be listed on 24th June 2024 for admission.

Summary

Issues Involved:
The issues involved in this judgment include the quashing and setting aside of the petitioner's arrest by the respondent No. 3-Inspector u/s Article 226 of the Constitution of India, declaration of the arrest as illegal and contrary to law, and the request for interim cash bail / regular bail.

Details of the Judgment:

Issue 1: Arrest and Detention
The petitioner sought the quashing of his arrest by the respondent No. 3-Inspector, CGST and Central Excise, Mumbai, and a declaration that the arrest was illegal. The petitioner's counsel argued that the arrest was made in an old case of 2021, where the Company had already paid taxes and cooperated with authorities. The counsel highlighted contradictions in the respondent No. 2's explanations for the delay in producing the petitioner before the Magistrate. The High Court found that the petitioner appeared to have been detained for more than 24 hours without proper justification, and criticized the practice of keeping a person overnight under the guise of recording a statement. The Court granted interim bail to the petitioner, emphasizing the importance of protecting citizens' liberty.

Issue 2: Legal Proceedings
The respondent No. 2 claimed that they did not have ready copies of the GST returns for the year 2024 and had to download them, resulting in a delay in producing the petitioner. The Court observed that the process of generating relevant GST returns, verification, and arrest memo took several hours, but found no valid reason for the overnight detention of the petitioner. The Court criticized the respondent No. 2 for not calling the petitioner on another day if documents were not available, stating that arrest should not be made in a routine manner based on mere allegations.

Conclusion:
The High Court granted interim bail to the petitioner, highlighting the importance of protecting individual liberty and ensuring that arrests are not made arbitrarily. The Court criticized the practice of detaining individuals overnight without proper justification and emphasized the need for authorities to act responsibly in such matters. The case was listed for further proceedings on a specified date.