10.06.2022: Bail granted considering tax evasion below 5 crores and a bailable offence under Section 132 – Gujarat High Court

gujarat-high-courtThe Hon’ble High court of Gujarat vide its order dated 28th April 2022 in the matter of Vimal Yashwantgiri Goswami Vs. State of Gujarat in R/Criminal Misc. Application No. 4255 of 2022, held that it is not in dispute that the tax evasion is below 5 crores and will be a bailable offence as per Section 132(1)(i) read with Sections 132(4) and Section 132(5) of the Gujarat GST and the Central GST Act, 2017.  Thus, ordered for release of the Applicant on bail subject to conditions therein.

The Applicant-accused has filed the present application praying for bail in connection with File No.AC-1/ UNIT-75/BVN/201920 registered with the Office of the Assistant Commissioner of State Tax-1, Unit-75, 1 st Floor, Bahumali Bhawan, Bhavnagar and File No.ACCT-UNIT-9/HEUGO METAL/SUMMONS/2021-22 registered with the Office of Assistant Commissioner of State Tax, Unit-9, Division (1), Ahmedabad; for the alleged offence punishable under Section 132(1)(b)(c)(f)(K)(I) of the Gujarat Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 read with Sections 463 and 120(B) of the Indian Penal Code, 1860.

Facts: –

  • That the respondent No. 2 filed a Criminal Complaint No. 6846 of 2019 before the Court of Additional Judicial Magistrate, First Class, Bhavnagar on 16.10.2019 for the above alleged offence, wherein the applicant has been arraigned as accused No. 4 for ITC evasion of Rs.4,51,05,130/- by M/s Heugo Metal.

Submissions on behalf of the Applicant: –

  • It was submitted on the behalf of the Applicant that even if it is assumed that the contents of complaint are correct, the total amount pertaining to Heugo Metal, of which the applicant is a proprietor, would come to Rs.4,51,05,130/- and the same would be a bailable offence as per Section 132(1) (i) read with Section 132(4) & 132(5) of the Gujarat GST and Central GST Act, 2017. Further the maximum punishment for the said offence under Section 132 is five years.
  • That the liability of tax evasion of Dattatrey Corporation i.e. accused No.1 is also added with the company of the applicant. The Applicant was implicated in the offence in 2019, when its residential premise was raided on 19.07.2019.
  • It was informed that the Applicant’s registration cancellation order dated 25.02.2020 in Special Criminal Application No. 15508 of 2020, was quashed and set aside by this court vide its order dated 10.12.2020. Thereafter, Special Civil Application No. 5410 of 2020 against the attachment of bank accounts of the applicant, was also disposed of vide order dated 16.01.2022, since the validity of attachment order had expired.
  • It was submitted that the applicant is ready and willing to cooperate with the investigation, and the fact that the maximum punishment for the crime is 5 years, custodial interrogation of the applicant is not necessary. Further documents on which investigation is premised are already in the custody of Investigating Officer.
  • That on instructions, it was stated that the applicant is ready and willing to abide by all the conditions, including imposition of conditions with regard to powers of investigating agency to file an application before the competent Court for his remand. However, right to oppose the same may be kept open for the applicant.  Therefore, it was submitted that considering the above facts, the applicant may be granted bail.

On the other hand, the bail was opposed by the respondent-state looking to the nature and gravity of the offence.  Further it was submitted that the applicant had connived with other co-accused and the total tax evasion is more than Rs. 5 crores.  Thus, the custodial interrogation of the Applicant is necessary.

Held: –  

  • The Hon’ble Court after considering the submissions from the both sides and material placed on record, facts of the case, nature of allegations & gravity of offences, was inclined to grant bail to the applicant.
  • It was found that the tax evasion on the part of the applicant’s Company Heugo Metal, is Rs. 4,51,05,130/-. However, the total tax evasion is Rs. 7,55,76,378/- (Above 5 Crores) which involves tax liability of other company Dattatrey Corporation (Accused No. 3) also.  Both the companies are different and separate entities having separate GST numbers.
  • It was observed that the order cancelling the registration of M/s Heogo Metal has been quashed by this court, and the attachment order has expired. It has been now more that 3 years, the premises of the applicant was raided (in 2019).  Even if the evasion is more than 5 crores maximum punishment is five years.
  • That in the present case it has not been disputed that the tax evasion is less than 5 crores. Thus, it becomes a bailable offence in view of Section 132(1)(i) read with Section 132(4) & Section 132 (5) and the appellant has carved out a case for grant of bail under the provisions of Section 438 of Cr.P.C. 
  • Further the Hon’ble Court also took note of decisions in Sushila Aggarwal vs. State (Nct of Delhi), AIR 2020 SC 831 and Siddharam Satlingappa Mhetre vs State of Maharashtra, AIR 2011 SC 312.
  • The Hon’ble court with the above findings allowed the present application for bail and ordered for release of the applicant in the event of his arrest with respect to the alleged offence, on his executing a personal bond of Rs.10,000/- (Rupees Ten Thousand Only) with one surety of like amount on the following conditions that he: – (i) shall cooperate and be available for interrogation whenever required, (ii) shall remain present at the concerned Police Station on 05.05.2022 between 11 A.M and 2 P.M., (iii) shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the fact of the case, (iv) shall not obstruct or hamper the police investigation and not to play mischief with the evidence collected or yet to be collected by the police, (v) shall not change his residence till the final disposal of the case till further orders, (vi) shall not leave India without the permission of the concerned trial court and if having passport shall deposit the same before the concerned trial court within a week.
  • It Was further held that despite the above, it would be open to investigating agency to apply for the police remand of the applicant before the Competent Magistrate. The applicant shall remain present before the concerned Magistrate on the dates of hearing, as directed to him.  However, this is without prejudice to the right of the accused to seek stay, if remand is granted, and the power of concerned Magistrate to consider such a request in accordance with law.  The applicant, if remand is granted, upon completion of such period of police remand, shall be set free immediately subject to the other conditions of the bail order.

The Hon’ble High Court, as stated above, allowed the bail application.

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