2014 (3) TMI 589 - HC - Service Tax

Application for bail - petitioner has been charged for commission of offence punishable under Section 89(1)(d) of the Finance Act, 1994 - Held that - On query, the learned lawyer of the Union of India could not satisfy me whether strictly custodial detention is necessary for interrogation or not vis- -vis their prayer as embodied in the petition itself. It is correct that the offence is alive till now but it is not less than correct that when it was originated, the offence was bailable in view of the observation made by the Hon ble Apex Court 2010 (12) TMI 1085 - SUPREME COURT . It is also reckoned that the new Act does not have any retrospective effect. If this be so, the question of bailability and non-bailability almost comes to a point of merger, the benefit of which should be extended to the accused person. - Bail granted subject to conditions.

Summary

Issues:
1. Interpretation of the offence under Section 89(1)(d) of the Finance Act, 1994.
2. Retroactive application of the amended provisions of the Financial Act, 2013.
3. Distinction between the present Section and Section 41A of the Code of Criminal Procedure.
4. The authority to arrest under Section 91 of the amended Financial Act.
5. Dispute regarding tax assessment and payment by the petitioner.
6. Circumstances of the petitioner's arrest and ongoing departmental enquiry.
7. Necessity of custodial detention for interrogation.

Analysis:
1. The petitioner was charged under Section 89(1)(d) of the Finance Act, 1994. The offence was alleged to have occurred between 2008 and 2012.
2. The petitioner argued that the offence was initially bailable based on a previous Supreme Court decision but became non-bailable due to the 2013 amendment. The petitioner contended that retrospective application would violate constitutional rights under Article 20(1) and Article 21.
3. The petitioner distinguished the present Section from Section 41A of the Code of Criminal Procedure, citing a relevant case. The petitioner sought bail based on this distinction.
4. The petitioner raised concerns about the authority to arrest under Section 91 of the amended Financial Act, highlighting discrepancies in the arrest procedure.
5. There was a dispute regarding the tax assessment of Rs.67 lakhs, with the petitioner claiming to have paid Rs.12 lakhs and disputing the calculation.
6. The petitioner's arrest was questioned as it occurred before a scheduled departmental enquiry, raising doubts about the legality of the detention.
7. The necessity of custodial detention for interrogation was debated, with the court noting that while the offence was ongoing, the initial bailability status should be considered.

Judgment:
The court granted bail to the petitioner based on certain conditions, including a bond and sureties, regular meetings with the complainant, providing contact details, restrictions on leaving the state, depositing the passport, and a monetary deposit. The court clarified that the bail order should not influence the trial proceedings and was passed without prejudice to the rights of the parties.