Department cannot arrest without issuing a notice for recovery of GST

[CA Bimal Jain]

The Hon’ble Allahabad High Court in RAVINDER NATH SHARMA@ RAVUBDER SHARMA VERSUS UNION OF INDIA - 2023 (7) TMI 626 - ALLAHABAD HIGH COURT granted the bail to the assessee on some conditions and held that the arrest was made without justifiable reasons and no GST recovery notice was issued.

Facts:

Ravinder Nath Sharma (“the Applicant”) has been arrested without assigning any reason and no notice for recovery of GST had been issued against him, making the arrest as illegal and till the date, no penalty or taxes has been ascertained as per the Central Goods and Services Tax Act, 2017 (“the CGST Act”). The Applicant was in jail since February 09, 2023.

The Revenue Department (“the Respondent”) submitted that the allegations imposed are very serious in nature and if the Applicant is released on bail, the Applicant will again indulge in similar activities and will misuse the liberty of bail.

The Applicant contended that the alleged offences were compoundable in nature.

The Applicant relied upon the Judgement in SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION & ANR. - 2021 (10) TMI 1296 - SUPREME COURT  wherein the Hon’ble Supreme Court held that till date penalty or taxes has not been ascertained as per the CGST Act the offences are compoundable in nature and triable by Magistrate.

The Respondent contended that the grant of bail could potentially misuse the liberty granted by bail.

The Applicant contended that there is no previous criminal history so he shall not misuse the liberty of bail.

The Applicant filed bail application before the Hon’ble Meerut Session court which was rejected vide an order dated May 26, 2023 (“the Order”).

Aggrieved by the order, the Applicant filed bail application before the Hon’ble Allahabad High Court praying for granting the bail application.

Issue:

Whether the Revenue Department has right to arrest the Applicant without assigning any reason or without issuing of notice for Recovery of GST?

Held:

The Hon’ble Allahabad High Court in RAVINDER NATH SHARMA@ RAVUBDER SHARMA VERSUS UNION OF INDIA - 2023 (7) TMI 626 - ALLAHABAD HIGH COURT held as under:

• Opined that, the court has to keep in mind the nature of accusation, the nature of the evidence, the character of the accused, the circumstances which are peculiar to the accused, his role and involvement in the offence, his involvement in other cases and reasonable apprehension of the witnesses being tampered with will have to be taken into consideration for granting bail.
• Relied upon the judgement in MAHIPAL VERSUS RAJESH KUMAR @ POLIA & ANR. - 2019 (12) TMI 1461 - SUPREME COURT  wherein the Hon’ble Supreme court held that at the stage of assessing whether a case is fit for the grant of bail, the court is not required to enter into a detailed analysis of the evidence on record to establish beyond reasonable doubt the commission of the crime by the Accused.
• Held that, the arrest was made without justifiable reasons and no GST recovery notice was issued on the following conditions:
  • The Applicant shall not directly or indirectly make any inducement, threat, or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the court or to any police officer or tamper with the evidence.
  • The Applicant shall not pressurize/intimidate the prosecution witnesses.
  • The Applicant shall remain present, in person, before the trial court on the dates fixed for (i) opening of the case, (ii) framing of charge and (iii) recording of statement under Section 313 of the CRPC.
  • The Applicant shall not indulge in any criminal activity or commission of any crime after being released on bail and will present before the trial court before each fixed date.

(Author can be reached at [email protected])