2023 (2) TMI 647 - HC - GST

Seeking grant of anticipatory bail - default of tax evasion under the SGST Act alleged against the petitioner - HELD THAT - The material on record produced in the case diary does not reveal that the case against petitioner is a false one. Prima facie it appears that allegations made against the petitioner need to be investigated and since a lot many Institutions and their office bearers/ proprietors/Directors are involved and the money trail has to be traced to its origin the requirement shown by the prosecution for custodial interrogation of petitioner does not appear to be unreasonable. The amount of tax evasion is more than 15 crores for which though the maximum punishment prescribed is 5 years but considering the fact that the said allegations cast adverse shadow upon the financial health of various institutions including the Bank thereby belying the trust of common man in the even tempo of economic growth this Court declines to interfere. This Court prima facie feels from the complexity of allegations where very large tax evasion is involved and the money trail has to be traced to its origin the demand of prosecution for custodial interrogation of petitioner appears to be reasonable - bail application dismissed.

Summary

Issues:
Anticipatory bail application under Section 438 of Cr.P.C. in a case involving alleged offences under Section 132(1)(i) of the State Goods and Service Tax (SGST) Act, 2017 and Section 120B of IPC.

Analysis:

1. Nature of Allegations and Need for Custodial Interrogation:
The petitioner sought anticipatory bail contending that the evidence collected in the investigation is not incriminating and that the tax evasion allegations primarily target co-accused individuals. The petitioner argued that custodial interrogation is unnecessary as he has cooperated by submitting detailed responses to summons. Citing the decision in Siddharam Satlingappa Mhetre Vs. State of Maharashtra, the petitioner emphasized willingness to cooperate without arrest. However, the prosecution highlighted the necessity of custodial interrogation due to the petitioner's unavailability during the investigation, indicating a need to trace the money trail and address large-scale tax evasion allegations.

2. Involvement and Relationship with Co-Accused:
The petitioner's counsel emphasized the lack of a direct relationship with the Commercial Corporation implicated in the case, attributing involvement to the co-accused. The prosecution, however, pointed out significant financial transactions in the petitioner's bank account during the relevant period, raising suspicions. Additionally, a forged letter concerning the petitioner's account was highlighted, further complicating the matter.

3. Judicial Parameters for Anticipatory Bail:
Referring to the guidelines laid down by the Apex Court in Siddharam Satlingappa Mhetre case, the court considered factors such as the gravity of accusations, the possibility of the accused fleeing, and the impact on a large number of people. The court stressed the need to balance the rights of the accused with the interests of a fair investigation and prevention of harassment. The court also noted the importance of evaluating the genuineness of the prosecution's case before granting bail.

4. Decision and Rationale:
After evaluating the facts and legal principles, the court found that the petitioner's conduct of evading investigation raised suspicions of non-cooperation. Given the complexity of the case involving significant tax evasion and the need to trace financial transactions, the court deemed the prosecution's demand for custodial interrogation reasonable. Declining the anticipatory bail application, the court highlighted the gravity of the alleged offence and the petitioner's criminal antecedents, indicating a refusal to interfere in the matter.

5. Conclusion:
The court dismissed the bail application under Section 438 of Cr.P.C., emphasizing the seriousness of the allegations, the necessity of custodial interrogation, and the complexity of the case involving substantial tax evasion. The decision aimed to uphold the integrity of the investigation process while safeguarding the rights of the parties involved, without prejudicing their positions during the ongoing investigation and trial.