2023 (4) TMI 1309 - HC - GST

Tax Evasion Accused Granted Conditional Bail, Required to Deposit Rs.5 Crores Under Protest with Strict Compliance Measures

HC granted bail in tax evasion case under GST Act, requiring petitioner to deposit Rs.5 Crores 'under protest'. Court distinguished economic offenders ... Seeking grant of bail u/s 439 CrPC - economic offence Or not - Offence punishble under Sections 132 (1) (b), (f), (h), (j), & (l) of Central Goods and Services Tax Act, 2017 - HELD THAT:- It is an admitted position that petitioner had evaded the tax and got the benefit of input tax credit of nearing Rs.88.33 Crores. Hon’ble Apex Court in various pronouncement observed that economic offender should not be dealt as a general offender and in circumstances while granting bail to Vinay Kant Ameta directed him to deposit Rs.200 Crores. Thus, the bail application is allowed. Issues involved:The judgment involves a bail application filed u/s 439 Cr.P.C. arising from a complaint under Sections 132 (1) (b), (f), (h), (j), & (l) of the Central Goods and Services Tax Act, 2017.Summary:1. The petitioner, accused of tax evasion and benefiting from input tax credit, sought bail claiming wrongful implication. The petitioner's counsel argued that the offence is compoundable, the maximum punishment is 5 years, and there is no evidence of creating fake firms. Reference was made to a similar case of Dananjay Singh granted bail. The delay in trial was highlighted, requesting bail. 2. The petitioner's counsel cited various judgments to support the bail application.3. The respondent's counsel opposed the bail, alleging the petitioner and co-accused created fake firms for substantial financial gain. Economic offences were emphasized, mentioning a case where a deposit of Rs.200 Crores was directed for bail. The respondent proposed a deposit equivalent to the loss incurred for granting bail.4. The respondent's counsel referred to specific judgments to counter the bail application.5. After considering arguments from both sides, the court noted the tax evasion and input tax credit benefit. Economic offenders were distinguished from general offenders, and a precedent of a large deposit for bail was mentioned. The court ordered the petitioner to deposit Rs.5 Crores 'under protest' for bail.6. The bail application u/s 439 Cr.P.C. was allowed, with conditions for the petitioner's release on bail, including a personal bond and sureties. The trial court was instructed to record the petitioner's deposit before approving the bail bonds.