2023 (12) TMI 830 - HC - GST

Seeking cancellation of the bail granted to the respondent/accused - suppression of value of taxable supplies - non issuance of invoices with intention to evade payment of GST - HELD THAT - When the arrest memo does not contain the reasons why the individual has to be arrested which would also be the grounds for the arrest then, at this stage, it may not be appropriate on the part of this Court to go on a hunting spree trying to cull out the reasons for arrest. They may be available in the file and it is always be to the respondent to examine them but as observed by the learned Principal Sessions Judge, the accused was not furnished with a copy of any reason to believe that it is imperative that he must be arrested. It is pointed out on behalf of the petitioner herein that in the remand report the reasons to believe that the person should be taken into custody have been stated. A remand report is for the subjective satisfaction of the Magistrate, who actually remands the accused to judicial custody. It is not intended for the accused. It is presented before the Magistrate before whom the accused is produced and contains grounds substantiating that it is required that the accused should be remanded to judicial custody and not be let out on bond or to hold that there is no necessity to be remand. Therefore, the reasons given in the remand report would not take the petitioner anywhere so far as this case is concerned. An order granting or denying bail can never be looked upon as sufficient material for passing a Judgment of either conviction or acquittal - Petition dismissed.

Summary

Issues involved:
The petition seeks cancellation of bail granted to the accused under Section 439(2) of Cr.P.C. based on allegations of GST Act violations and suppression of taxable supplies.

Details of the Judgment:

Issue 1: Grant of Bail
The respondent was granted bail by the Principal Sessions Judge, Chennai, after an application was dismissed by the Additional Chief Metropolitan Magistrate. The complainant challenged this bail order seeking cancellation.

Issue 2: Reasons for Grant of Bail
The Court considered whether the reasons for granting bail were justifiable under the CGST Act and in conformity with its provisions. The Judge examined Section 69(2) of the CGST Act, noting similarities with the Prevention of Money Laundering Act (PMLA) in terms of reasons to believe the accused will be punished for the alleged offenses.

Issue 3: Recording of Reasons
The Court emphasized the importance of recording reasons to arrest in writing under the CGST Act, ensuring clarity and preventing manipulation of reasons. It was highlighted that reasons must lead to a reasonable belief that the accused will be punished for the alleged offenses.

Issue 4: Lack of Reasons in Arrest Memo
The Court noted that the arrest memo did not contain the specific reasons for the arrest, raising concerns about the lack of transparency in the decision-making process. The Judge questioned the absence of documented reasons for the belief that arrest was necessary.

Issue 5: Impact on Trial
The petitioner expressed concerns that the findings of the Sessions Judge might influence the trial proceedings. However, the Court clarified that bail orders should not impact the judgment of conviction or acquittal, emphasizing the need for an independent assessment of evidence during trial.

In conclusion, the Criminal Original Petition seeking cancellation of bail was dismissed, with the Court highlighting the need for transparency in recording reasons for arrest and emphasizing that bail orders should not unduly influence trial judgments.