Arvind Kumar Munka Vs. Union of India – 2020 (35) G.S.T.L. 32 (High Court – Calcutta)

Trial Court given liberty to release accused on bail if accused approaches authorities for compounding of offence with minimum deposit of 20% of evaded amount.

Facts- The petitioner has renewed his prayer for bail under Section 439 of the Code of Criminal Procedure, 1973 as his earlier application was rejected by this Court vide order dated 24-12-2019 [2020 (34) G.S.T.L. 29 (Cal.)]. The petitioner prayer for bail was lastly rejected by the Court of Judicial Magistrate. The petitioner as found in the earlier order that he is a Chartered Accountant by profession and with the similar contention he has averred that he is no way connected with the instant case. The petitioner has been arraigned as an accused in this case under Section 69 read with Section 132(1) of the Central Goods and Services Tax Act, 2017 on the allegation that in connivance with the other accused persons, namely, Sanjay Kumar Pandit, Nagendra Kumar Dubey alias Sandip Dube, and Mr. Vijay Rajpuriya along with various other persons he allegedly issued GST Invoices without any supply of the goods or services to anybody on commission basis causing loss of more than 98 crores approximately.

Held- The Hon’ble High Court held that I have heard Mr. Basu Learned Senior Counsel appearing for the petitioner and Mr. Maity Learned Counsel appearing for the Union of India and considered my earlier judgment dated 24-12-2019 wherein I have vividly discussed the facts and the law involved in the case and bearing in mind the gravity of the economic offence and the principle as laid in case of P.V. Ramana Reddy v. Union of India reported in 2019 (26) G.S.T.L. J175 (S.C.) holding that though Section 69(1) of CGST, 2017 confers power upon the Commissioner to order arrest of a person for cognizable and non-bailable offence does not contain safeguard incorporated in Sections 41 and 41A of the Code of Criminal Procedure, 1973 in view of provision of Section 70(1) of the said Act same must be kept in mind before arresting a person. However, Section 41A(3) of the Code of Criminal Procedure does not provide an absolute irrevocable guarantee against arrest, while turning down the prayer for release of the petitioner on bail and thereby held that petitioner would not be entitled to be enlarged on bail but gave him the liberty to approach the authority for compounding of the offence under Section 138 of CGST Act “ Compounding of offence”. I once again reiterate and record that the petitioner may be released on bail by the Learned Trial Court if he finds that he has approached the authority for compounding of the offence on deposit of at least 20% of the evaded amount on account of CGST. In the context above, the CRM 1259 of 2020 is dismissed.

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