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2020 (10) TMI 525 - HC - GSTGrant of Bail - Second time arrest of a person in different capacity - learned Senior Standing Counsel for the DGGI submits that the impugned order is legally flawed for the reason firstly, that the transactions relating to M/s Gaia Overseas and M/s Aadhar India are separate and distinct transactions, each of which comprise a separate offence under the GST Act; and secondly, that merely because the respondent is a partner in one of the entities and sole proprietor of the other, does not mean that he cannot separately be arrested for a distinct transaction that he undertook through his sole proprietorship concern M/s Aadhar India. HELD THAT - Let counter-affidavit be filed within 03 weeks; rejoinder thereto, if any, be filed within 02 weeks thereafter - List on 17.12.2020.
Issues:
1. Granting of bail based on separate transactions involving different entities under the GST Act. 2. Legal validity of the impugned order allowing bail to the respondent. 3. Payment of evaded tax in relation to transactions involving different entities. Analysis: Issue 1: The petitioner, Directorate General of GST Intelligence (DGGI), challenges the order granting bail to the respondent based on separate transactions involving different entities, M/s Gaia Overseas and M/s Aadhar India. The DGGI argues that each transaction constitutes a distinct offense under the GST Act. The DGGI contends that being a partner in one entity and the sole proprietor of another does not preclude separate arrests for distinct transactions conducted through the sole proprietorship. The contention is that the transactions are separate and must be treated as such under the law. Issue 2: The DGGI asserts that the impugned order allowing bail to the respondent is legally flawed. It is argued that the respondent's arrest in the matter related to M/s Gaia Overseas does not exempt him from being arrested for transactions involving M/s Aadhar India. Additionally, the DGGI highlights that despite allegedly securing a portion of the evaded tax in the M/s Gaia Overseas transactions, no payment has been made concerning the transactions of M/s Aadhar India. This lack of payment is emphasized as a crucial point in challenging the validity of the bail granted to the respondent. Issue 3: The DGGI raises concerns about the respondent's failure to pay any portion of the evaded tax in relation to the transactions of M/s Aadhar India. This non-payment is seen as significant in the context of the bail granted based on the respondent's purported payment related to the M/s Gaia Overseas transactions. The issue of non-payment in one set of transactions while seeking bail based on payment in another set is a central point of contention in the legal challenge brought forth by the DGGI. In conclusion, the High Court has issued notice on the matter and directed the respondent to file a counter-affidavit within a specified timeframe. The case is scheduled for further proceedings on a specific date. The legal arguments presented by the DGGI regarding the distinct nature of transactions, the legal validity of the bail order, and the issue of non-payment of evaded tax in specific transactions form the core of the ongoing legal dispute before the court.
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