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2020 (9) TMI 76 - HC - GSTGrant of Bail - condition to deposit entire demand of GST with interest for Bail - creation of fictitious firms and tax invoice - GST evasion - petitioner unable to pay outstanding amount for fulfilling conditions envisaged under Section 438 Cr.P.C. - presumption of innocence or not - HELD THAT - This Court is of the opinion that the condition is onerous and is liable to be set aside. This Court is of the opinion that since the maximum punishment which can be awarded is upto 5 years and the petitioner has almost undergone a period of one year having been arrested on 06.09.2019. The onerous conditions would thus violate Article 21 of the Constitution of India as the liberty of the petitioner is being deprived - The factum of the investigation being complete and enquiry having been completed and the relevant documents being in possession of the prosecution, the petitioner thus cannot be detained during the trial only on account of the fact that a bail order in the form of a recovery proceedings has been passed against him to pay the outstanding worth almost ₹ 2 crores along with interest. The condition of payment of ₹ 1,94,78,017/- along with interest is set aside. The bail bonds of ₹ 50 lakhs with one surety are reduced to ₹ 25 lakhs which shall be in the form of immoveable property, to the satisfaction of the Ilaqa/Duty Magistrate, Panipat. The order of the Addl. Sessions Judge dated 08.04.2020 (Annexure P-2) is, accordingly, modified, whereas the other conditions shall remain intact. Petition allowed.
Issues Involved:
1. Quashing of bail conditions. 2. Legality of imposing financial conditions for bail. 3. Applicability of legal precedents on bail conditions. 4. Protection of State revenue interests. 5. Liberty and rights under Article 21 of the Constitution of India. Issue-wise Detailed Analysis: 1. Quashing of Bail Conditions: The petitioner sought quashing of the condition in the order dated 08.04.2020, which required him to furnish bail bonds of ?50,00,000/- with one surety of like amount and to pay an outstanding liability of ?1,94,78,017/- along with interest. The petitioner argued that these conditions were practically denying him bail as he could not pay the outstanding amount. The court found the conditions onerous and liable to be set aside. 2. Legality of Imposing Financial Conditions for Bail: The petitioner argued that the condition to pay the outstanding liability was based on a presumption of guilt, which is impermissible. The court referred to the Supreme Court's judgment in Sumit Mehta Vs. State of N.C.T. of Delhi, which held that imposing financial conditions for bail should not amount to prejudging the issue or effecting recovery from the accused. The court found that the Trial Court had not considered subsequent modifications to similar conditions in previous judgments, which reduced the financial burden on the accused. 3. Applicability of Legal Precedents on Bail Conditions: The court cited several Supreme Court judgments, including Sreenivasulu Reddy Vs. State of Tamil Nadu and Sanjay Chandra Vs. CBI, which emphasized that bail conditions should not be unreasonable or punitive. The court noted that the imposition of onerous financial conditions violated the principle that bail is the rule and jail is the exception, and that the petitioner had a statutory right to be released on bail. 4. Protection of State Revenue Interests: The State justified the conditions, arguing that the petitioner was involved in creating bogus firms and evading taxes, causing significant revenue loss. The court acknowledged that the State has sufficient remedies to recover the amount through other modes, such as provisional attachment under Section 83 of the Act. The court found that the conditional bail order effectively amounted to a recovery proceeding, which was not permissible. 5. Liberty and Rights under Article 21 of the Constitution of India: The court emphasized that the petitioner's liberty under Article 21 was being deprived due to the onerous conditions. The court reiterated that the seriousness of the charge alone is not sufficient to deny bail and that the petitioner is presumed innocent until proven guilty. The court highlighted that the investigation was complete, and the relevant documents were in possession of the prosecution, reducing the risk of tampering with evidence. Conclusion: The court accepted the petition and set aside the condition of payment of ?1,94,78,017/- along with interest. The bail bonds were reduced to ?25 lakhs in the form of immovable property, to the satisfaction of the Ilaqa/Duty Magistrate, Panipat. The order of the Addl. Sessions Judge dated 08.04.2020 was modified accordingly, while other conditions remained intact.
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