AN ASSESSEE HAS STATUTORY RIGHT TO SEEK ANTICIPATORY BAIL UNDER SECTION 438 OF CODE OF CRIMINAL PROCEDURE, 1973

[Mr. M. GOVINDARAJAN]

Arrest

The object of arrest and its detention of the accused person is primarily to secure his appearance at the time of trial and to ensure that in case he is found guilty he is available to receive the sentence.  If his presence at the trial could be reasonably ensured otherwise than by his arrest and detention, it would be unjust and unfair to deprive the accused of his liberty during the pendency of criminal proceedings against him.  The provisions regarding the release of accused person bail are aimed at ensuring the presence of accused at his trial but without unreasonably and unjustifiably interfering with his liberty.

Anticipatory bail

Anticipatory bail is a direction to release a person on bail, issued even before the person is arrested.   If the accused has a reason to believe that he or she may be arrested on accusation of having committed a non bailable offence then he or she has the right to apply for anticipatory bail in the Sessions Court or High Court.

Section 438(1) of Criminal Procedure Code, 1973 provides that where any person has reason to believe that he may be arrested on accusation of having committed a non bailable offence, he may apply to the High Court or the Court of Session for a direction under this section that in the event of such arrest he shall be released on bail and the Court may, after taking into consideration, inter alia, the following factors-

• the nature and gravity of the accusation;
• the antecedents of the applicant including the fact as to whether he has previously undergone imprisonment on conviction by a Court in respect of any cognizable offence;
• the possibility of the applicant to flee from justice; and
• where the accusation has been made with the object of injuring or humiliating the applicant by having so arrested, either reject the application forthwith or issue an interim order for the grant of anticipatory bail.

While granting anticipatory bail the respective Court may impose conditions on granting anticipatory bail.  Section 438(2) provides that the High Court or Sessions Court may include such conditions in the directions in the light of the facts of the particular case, as it may think fit, including-

• a condition that the person shall make himself available for interrogation by a police officer as and when required;
• a condition that the person 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;
• a condition that the person shall not leave India without previous  permission of the Court;
• such other conditions as may be imposed under section 437(5), as if the bail were granted under that section.

It would be pertinent to mention that there was no provision relating to anticipatory bail in the Code earlier and it was introduced for the first time in the present Code of 1973 which came into force with effect from 1.4.1974 on the suggestion made in the 41st Report of Law Commission dated September 25, 1969 and the Joint Committee Report, the reason being"... where there are reasonable grounds for holding that a person accused of an offence in not likely to abscond or otherwise misuse his liberty while on bail there seems no justification to require him to send to custody and remain in prison for some days and then apply for bail". The codification of Section 438 was found necessary in view of the conflicting judicial decisions about the power of Court to grant anticipatory bail. The necessity for granting anticipatory bail arises mainly because sometimes influential persons trying to implicate their rivals in false cases for the purpose of getting them detained in jail for some days.

Statutory right?

In SHAMIM AHMED AND ORS. VERSUS STATE AND ORS. [2003 (4) TMI 602 - CALCUTTA HIGH COURT] the Calcutta High Court held that  it is essentially a statutory right conferred long after the coming into force of the Constitution.

Whether the assessee in a tax has the statutory right to get anticipatory bail?  Answer is in the following case law-

In ‘SRI HANUMANTHAPPA PATHRERA LAKSHMANA VERSUS STATE BY SENIOR INTELLIGENCE OFFICER, DIRECTORATE GENERAL OF GOODS AND SERVICE TAX INTELLIGENCE, BENGALURU ZONAL UNIT, BENGALURU - 2020 (6) TMI 379 - KARNATAKA HIGH COURT, the petitioner is dealing in both ferrous and non ferrous scrap.  During the regular course of business he has purchased goods from various registered and unregistered dealers and issued tax invoices.  On 07.02.2020 the respondent conducted inspection of business premises and drawn a mahazar.  The petitioner was directed on 08.02.2020 to appear before the proper officer.  Another summon was issued on 10.02.2020 to appear before the proper officer.  The petitioner has apprehended his arrest in the hands of the respondent for the offence punishable under section 132(5) of the CGST Act.  The petitioner filed a criminal petitioner before the High Court.

The petitioner submitted before the High Court that if he is arrested and sent to judicial custody he will be put into hardship and irreparable loss as he is having an old age mother and also a daughter and due to COVID 19 lockdown situation, his death may effect.  Even though he has not committed any offence, there is likelihood of his arrest for the non bailable offence.  He is ready to abide by any condition imposed by the High Court.  The offence is not punishable with death or imprisonment for life.  He is ready to offer any surety.  Therefore he prayed for granting anticipatory bail.

The respondent vehemently opposed the petition.  The respondent submitted that-

•  Intelligence was engaged in availment of fake input tax credit i.e., availing of credit on the invoices received from the persons without actual supply of goods. 
• Summons has been issued to the petitioner to appear before the Officer as per Section 70 of CGST Act, 2017.
•  In spite of issuing so many notices/summons the petitioner failed to appear before the Authority on various dates. 
• The inquiry is deemed to be judicial proceedings within the meaning Section 193 and section 228 of the Indian Penal Code.
• The whereabouts of the petitioner was also not known. 
• Neither the petitioner nor his authorized person approached the respondent till 03.03.2020.
• The petitioner is a habitual offender, he may commit same offence and he is deliberately avoiding his appearance for the purpose of enquiry proceedings.
• His bail petitions filed before the City Civil and Sessions Judge came to be dismissed.
• If the bail is granted to the petitioner, he will destroy the evidentiary material and other documents
• The anticipatory bail is not maintainable and it is pre matured.
• The petitioner is required to file only writ petition seeking relief under CGST Act.

The public prosecutor fairly admitted that there is no statutory bar in the CGST Act either expressly or impliedly for entertaining the bail petition under section 438 of Criminal Procedure Code.  The High Court analyzed the provisions of Section 132 of the CGST Act which contains both cognizable and non cognizable offences.  The High Court held that once a person apprehends his arrest in the hands of Commissioner under section 69 of the CGST Act, the assessee has statutory right to seek anticipatory bail under section 438 of Criminal Procedure Code. 

The allegation put forth by the prosecution is that the petitioner is said to have involved fraudulent involvement of input tax credit on the basis of invoices without actual supply of goods in contravention of section 16 of the CGST Act and caused loss to the exchequer for ₹ 9.05 crores approximately.  The preliminary state of investigation has been completed and they found, the input tax credit taken by the petitioner from the bogus entities and said to be created fake invoices in order to avail input tax credit and to make inquiry under section 70 of the CGST Act.  Therefore summons have been issued by the authorized officer under section 70 which clearly goes to show that the petitioner is reasoned to believe that he is apprehending his arrest in the hands of the respondent in case after his appearance before the authorizing officer as per section 69 of the CGST Act.   In case the petitioner is arrested, he is likely to remand to the judicial custody after his production before the Magistrate and by looking to the present COVID – 19 situations, if he is remanded to the judicial custody he will put to hardship and definitely, his health would likely to affect.  The offences are not punishable with death or imprisonment for life.  There is no statutory bar in the CGST Act for granting anticipatory bail by exercising power under Section 438 of Criminal Procedure Code.  Merely there were number of notices/summons issued by the respondent during the lock down for COVID 19 that itself is not a ground to reject the bail petition.  The High Court held that considering the fact and circumstances of the case, if an anticipatory bail is granted, no prejudice would be caused to the respondent.  The petitioner is ordered to be enlarged on bail in the event of his arrest under section 69 of the CGST Act by the respondent Authorized Officer, after enquiry under section 70 of the Act subject to the following conditions-

• The petitioner shall execute a person bond for ₹ 10 lakhs with two sureties to the Apprehending Authority or Authorized Officer.
• The petitioner shall appear before the Authorized Officer within one week, after receipt of the order for the purpose of enquiry under section 70 of the CGST Act.
• The petitioner shall not tamper with the prosecution evidence or any document directly or indirectly.
• The petitioner shall co-operate during the course of enquiry and shall not leave the country without prior permission of the Magistrate or the trial court and he shall surrender his passport, if any, to the concerned Authorized Officer.
• The petitioner shall appear as and when called for the purpose of any further investigation; and
• The petitioner shall not indulge in any similar offence.