2021 (12) TMI 1306 - HC - GST

Bail denied for Director in Rs. 869 Crore tax evasion case, citing economic threat.

The Court dismissed the bail application under Section 439 Cr.P.C. for the petitioner, a Director in M/s Miraj Products Private Limited, accused of tax ... Seeking grant of Bail - creation of fake firm for tax evasion - offence u/s 132 (1)(a), (f),(h),(j),(1) of Central Goods and Services Tax Act, 2017 - HELD THAT:- It is admitted position that the M/s Miraj Products Private Limited had evaded the tax. GST department had seized the one truck which was being unloaded at their premises. Department had collected data till today, tax evasion of ₹ 869 Crore. As per version of learned counsel for the petitioner, they had deposited ₹ 60 Crore as a protest. If they had not evaded the tax, then there would have been no occasion to deposit of ₹ 60 Crore as a protest. Apex Court in various pronouncement held that the economic offender should not be dealt as general offender because economic offenders run parallel economy and they are serious threat to the national economy. So, after considering the submission put-forth by learned counsel for the parties and in the facts and circumstances of the present case and also looking to the seriousness of the offence(s) alleged against the petitioner without expressing any opinion on the merits of the case, it is not a fit case to enlarge the petitioner on bail under Section 439 Cr.P.C. Bail application dismissed. Issues:Bail application under Section 439 Cr.P.C. for offence under Sections 132(1)(a), (f), (h), (j), (l) of Central Goods and Services Tax Act, 2017.Analysis:The petitioner, a Director in M/s Miraj Products Private Limited, filed a bail application claiming false implication in the case. The petitioner argued that the respondent's department lacked adequate data for the alleged tax evasion of Rs. 869 Crore and that the case was based on surmises and conjectures. The petitioner emphasized that there was no concrete evidence of creating false records and that the maximum punishment for the alleged offence was 5 years. Additionally, the petitioner highlighted the absence of seized unaccounted bills related to the packaging of tobacco, with the evaded tax amounting to Rs. 8,65,595, below the threshold of 5 crore, making it bailable. Moreover, the petitioner mentioned that M/s Miraj Products Private Limited had deposited Rs. 60 crore as a protest, indicating the compoundable nature of the offence and its trial by a Magistrate, thus seeking bail.The petitioner relied on judgments from the High Court of Delhi and the same Court in previous cases to support their arguments. However, the respondent, opposing the bail application, argued that the petitioner, being a Director in M/s Miraj Products Private Limited, was responsible for the tax evasion amounting to Rs. 869 Crore. The respondent alleged that the company had created a fake firm for tax evasion and that the investigation was ongoing. The respondent pointed out that failure to appear for investigation by various persons from the company indicated non-cooperation. The respondent emphasized that the deposit of Rs. 60 Crore would not have occurred if tax evasion had not taken place, urging the dismissal of the bail application.After considering the arguments from both sides, the Court acknowledged the tax evasion by M/s Miraj Products Private Limited, amounting to Rs. 869 Crore, and the deposit of Rs. 60 Crore as a protest. The Court highlighted the seriousness of economic offences and the threat they pose to the national economy. Without delving into the merits of the case, the Court concluded that given the gravity of the alleged offences, the petitioner could not be granted bail under Section 439 Cr.P.C., ultimately dismissing the bail application.