2022 (3) TMI 910 - HC - GST

Grant of anticipatory bail - the applicant has cooperated to the fullest extent by submitting reply to the notice/summons issued to him - applicant happens to be Director of a company which has gained a reputation in the said industry and was never indulged in any kind of breach towards any kind of Tax or other offences. - HELD THAT - Upon consideration of the facts and circumstances of the case, this Court could not come across any averment in the counter affidavit by the respondent no.2 to the impact that the applicant has not cooperated with the investigation that indirectly admits the situation that the applicant is cooperating with respondent no.2 and he has promised to continue to cooperate with the investigation, the applicant has no prior criminal antecedents brought on record. His implication can be made under cognizable and nonbailable offences u/s 132 (5) of the C.G.S.T. Act, if the allegations are found to be correct. As disclosed above, the personal liberty guaranteed under Article 21 of the Constitution of India is a fundamental right and in every case, arrest is not necessary. Under Section 438 Cr.P.C., where the implication of a person is for a non-bailable offence, he can apply for anticipatory bail. If the applicant cooperates with the inquiry, there is no requirement of his arrest. In the event the applicant, Akshat Jain is arrested, he shall be enlarged on anticipatory bail till the inquiry is concluded by the Proper Officer under Section 70 (1) of the C.G.S.T. Act or assessment is made whichever is earlier, on execution of a personal bond of ₹ 5,00,000/- and two sureties of the like amount before the Proper Officer concerned on the conditions imposed - application allowed.

Summary

Issues:
Grant of anticipatory bail under Section 70 of Central Goods and Services Tax Act, 2017 during trial.

Analysis:
The applicant sought anticipatory bail concerning Summons/Notice issued under Section 70 of the CGST Act, 2017. The applicant, a Director of a company, claimed innocence and cooperation with authorities. The applicant's company had a clean record of tax compliance and cooperation with the investigation. The applicant had already provided documents and statements to the authorities during the investigation process. The applicant argued that the investigation was incomplete, and no show cause notice had been issued, making it premature to determine any tax evasion or offense.

Legal Arguments:
The respondent authorities contended that the anticipatory bail application was not maintainable merely based on apprehension of arrest. They highlighted the applicant's statement implicating issuance of fake invoices, admissible as evidence under Section 136 of the CGST Act, and assessed tax liability at ?19.53 crores. Citing case law, the respondent argued against granting anticipatory bail, emphasizing the applicant's cooperation did not warrant relief.

Court's Decision:
After considering the facts, the Court noted the applicant's cooperation and lack of criminal antecedents. Acknowledging the fundamental right to personal liberty, the Court granted anticipatory bail to the applicant. The applicant was directed to cooperate with the inquiry, provide a personal bond, and adhere to specified conditions. The Court emphasized the need for the applicant's appearance and cooperation, ensuring the inquiry's conclusion by the Proper Officer under Section 70(1) of the CGST Act. Failure to comply with conditions would result in automatic rejection of the bail application.

Conclusion:
The Court allowed the anticipatory bail application, providing detailed conditions to safeguard the inquiry process and ensure the applicant's compliance. The decision balanced the applicant's rights with the investigative process, emphasizing cooperation and adherence to specified terms to maintain the protection granted.