2020 (2) TMI 516 - HC - GST

Second bail application - evasion of tax - It is contended that petitioner has sold the goods without generating the Outward supply invoice and has thus evaded tax - HELD THAT - The offence as alleged in the FIR is under Section 132(1)(a) read with Section 132(1)(h), (j) and (k) of the Rajasthan Goods and Services Tax Act, 2017, the maximum sentence provided under Section 132(a)(i) is five years. From the E-way bills produced with the charge-sheet, it is revealed that the total Inward supply was to the tune of ₹ 133 crores which included the import of ₹ 108 crores made by the petitioner. In the charge-sheet itself, the report of fire made to the police and the fire brigade is also available which goes to show that fire took place in the factory premises of the petitioner. Petitioner has already furnished the bond with regard to import of ₹ 108 crores and in case the export is not made within eighteen months, he is liable to pay in accordance with bond executed by him. Petitioner has remained in custody for a period of more' than five months. No notice with regard to tax outstanding has ever been issued to the petitioner. The second bail application allowed.

Summary

Issues:
1. Second bail application under Section 439 of Cr.P.C.
2. Offence under Section 132(1)(a) read with Section 132(1)(h), (j) and (k) of the Rajasthan Goods and Services [Tax] Act, 2017 (RGST).
3. Allegations of tax evasion and non-export of goods.
4. Arguments regarding the quantum of tax evasion and stock deficit.
5. Legal citations and judgments relied upon.
6. Opposing arguments by the Commercial Tax Department.
7. Consideration of contentions and decision on the bail application.

Detailed Analysis:
1. The petitioner filed a second bail application under Section 439 of Cr.P.C. concerning a criminal case pending before the Chief Metropolitan Magistrate for an offence under the Rajasthan Goods and Services Tax Act.

2. The petitioner was accused of importing goods worth ?108 crores, subject to export within a specified period. The petitioner argued that the export period had not yet expired and highlighted a fire incident at the factory premises.

3. The charge-sheet alleged tax evasion based on E-way bills, with discrepancies in the reported inward and outward supplies. The petitioner's status as a One-Star Export House and the initiation of bankruptcy proceedings were also mentioned.

4. The Commercial Tax Department opposed the bail application, citing a significant stock deficit and alleged tax evasion amounting to ?25 crores. They argued that the petitioner had sold goods without proper invoicing and had not exported the imported goods as required.

5. Legal citations such as judgments from the Madras High Court and Rajasthan High Court were relied upon by the petitioner's counsel to support the bail application.

6. The Commercial Tax Department vehemently opposed the bail, emphasizing the tax evasion amount and the discrepancy between import and export values.

7. After considering the contentions and evidence presented, the judge allowed the second bail application. The petitioner was granted bail on certain conditions, including a personal bond and surrendering the passport to the trial court.

This detailed analysis covers the issues raised in the judgment, including the allegations of tax evasion, legal arguments, opposing views, and the final decision on the bail application.