Cancellation of bail upheld for non-compliance and lack of cooperation. Interpretation of Finance Act disputed. Interim order extension denied.

The court upheld the cancellation of bail for the applicant due to non-compliance with bail conditions and lack of cooperation in the investigation. The court rejected the applicant's arguments regarding the interpretation of the Finance Act and emphasized the importance of adhering to legal obligations. Additionally, the applicant's request for an extension of an interim order was denied based on the circumstances and legal findings.

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Issues Involved:
1. Legality of the order dated 11/9/2014 cancelling the applicant’s bail.
2. Compliance with bail conditions imposed by the Sessions Court.
3. Interpretation and application of section 89(1)(d)(ii) of the Finance Act, 1994.
4. Applicant’s conduct and cooperation with the investigation.

Detailed Analysis:

1. Legality of the Order Cancelling Bail:
The primary issue is the legality of the order dated 11/9/2014 passed by the Additional Sessions Judge, Vadodara, which cancelled the bail granted to the applicant. The applicant had initially been granted bail with specific conditions, including the payment of a certain percentage of the outstanding service tax. The applicant failed to comply with these conditions, leading to the cancellation of bail. The court held that the applicant’s failure to adhere to the bail conditions justified the cancellation.

2. Compliance with Bail Conditions:
The applicant was required to deposit 30% of the outstanding amount within two months of release and 10% of the outstanding amount monthly thereafter. The applicant failed to meet these conditions, prompting the original complainant to file for cancellation of bail. The court noted that despite the applicant’s partial payments and efforts to recover funds, the conditions were not fulfilled. The applicant’s non-compliance with the bail conditions was a significant factor in the cancellation of bail.

3. Interpretation and Application of Section 89(1)(d)(ii) of the Finance Act, 1994:
The applicant argued that the offence under section 89(1)(d)(ii) of the Finance Act, 1994, which became cognizable and non-bailable from 10.5.2013, was not applicable as the service tax liability for the period 2013-2014 was only Rs. 30,32,939/-. The court dismissed this argument, stating that the legal position was well-known at the time of the initial bail order and could not be raised for the first time in the revision application. The court emphasized that ignorance of the law by the applicant’s advocate was not a valid ground for revising the order.

4. Applicant’s Conduct and Cooperation with the Investigation:
The applicant’s conduct, including the failure to pay the outstanding amount and non-cooperation with the investigation, was scrutinized. The court highlighted that the applicant had floated another company and evaded service tax payments, which demonstrated a lack of intent to comply with legal obligations. The applicant’s actions were seen as a calculated move to delay payment, further justifying the cancellation of bail.

Conclusion:
The court dismissed the revision application, upholding the cancellation of bail due to non-compliance with bail conditions and the applicant’s conduct. The court found no merit in the applicant’s arguments regarding the interpretation of section 89(1)(d)(ii) of the Finance Act and emphasized the importance of adhering to legal obligations and conditions imposed by the court.

Further Order:
The applicant’s request for an extension of the interim order dated 6.5.2016 was rejected, with the court noting the peculiar circumstances under which the order was initially passed. The court found no justification for granting the extension, given the applicant’s conduct and the legal findings in the judgment.

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