2014 (6) TMI 1061 - HC - Central Excise

Grant of Bail under Section 439 Cr.P.C. for Central Excise Act Offenses

The Court granted bail to the accused-petitioner under Section 439 Cr.P.C. for offenses under the Central Excise Act. Despite highlighting the gravity of ... Seeking grant of Bail - evasion of huge Central Excise - allegation is that petitioner has not got himself registered under the Central Excise Act and got registered after search was conducted - HELD THAT:- Taxes play vital role in the development of a country and are needed not only for infrastructural purposes but also social medical and other needs of a country. Tax dodgers and evaders are certainly required to be dealt with heavy hands and need no sympathy and Revenue departments are well within their rights to nab tax dodgers and evaders of taxes. This Court do not support tax evaders and tax dodgers. Further, in such cases, where tax evasionis prima-facie of very high value, the question of bail should be considered seriously and it should not be granted as a matter of course. Tax evasion of high value certainly jeopardizes the entire economy of the country and is an economic crime of serious magnitude. It is also to be noticed that evasion of taxes whether Income Tax, Central Excise, Service Tax or any other taxes all come in the category of economic offences and the recent trend of decisions in the matter of bail, in this country, has been to deal with economic offences seriously but prima-facie in this case since the principal amount of Central Excise stands deposited and admitted to have been received by the respondents before approaching this Court therefore, without expressing any opinion on merits/demerits of the case, the accused-petitioner deserves to be enlarged on bail under Section 439 Cr.P.C. This bail application is allowed and it is directed that the accused petitioner Suresh Sharma S/O Shri Geegraj Jangid be released on bail under Section 439 Cr.P.C., subject to conditions imposed. Issues:Bail application under section 439 Cr. P.C. arising from rejection by Trial Court.Analysis:The petitioner's counsel argued that a demand of Rs. 1.54 Crores under the Central Excise Act was raised without basis, with issues related to facts and legalities, highlighting the absence of a proper show cause notice. It was mentioned that Rs. 15 Lac was initially deposited, and subsequently, Demand Drafts totaling Rs. 1.39 Crores were handed over to the respondent department, covering the disputed demand. The respondent department, represented by Mr. Shukla, justified the demand based on a search revealing evasion of Central Excise, emphasizing the petitioner's delayed registration under the Act. The respondent also pointed out outstanding interest and penalty amounts, objecting to bail due to the petitioner's history of evasion.The judgment stressed the importance of taxes for a country's development, condemning tax evasion and emphasizing the need to address tax dodgers firmly. It highlighted the serious economic impact of high-value tax evasion, categorizing it as a significant economic offense. While acknowledging the seriousness of economic crimes, the Court noted the principal amount of Central Excise being deposited before the bail application, leading to the decision to grant bail under Section 439 Cr.P.C. to the accused-petitioner.The bail application was allowed, directing the release of the accused-petitioner on bail under Section 439 Cr.P.C. for offenses under the Central Excise Act, provided specific conditions were met. The Court permitted the respondents to continue their investigation lawfully, including examining other individuals related to the case. The petitioner was instructed to cooperate with the authorities during the assessment process, with a warning that non-cooperation could lead to legal action by the Revenue Authorities for assessment completion.In conclusion, the judgment granted bail to the accused-petitioner, emphasizing the seriousness of tax evasion while considering the deposited principal amount and the legal obligations for cooperation and investigation by both parties.