2017 (2) TMI 605 - HC - VAT and Sales Tax

Bail granted to advocate in tax case under Code of Criminal Procedure

RAJESHBHAI ARVINDBHAI PATEL Versus STATE OF GUJARAT

The court granted bail to the applicant under Section 438 of the Code of Criminal Procedure in a case involving offenses under the Indian Penal Code and ... Obtaining VAT registration for illegal purpose - role and involvement of tax professionals - Offences punishable u/s 406, 409, 420, 467, 468, 471, 474, 120(B) of the Indian Penal Code read with Sections 85(1)(b)(c)(e)(f)(g), 85(2)(j), 85(4) and 85(c) of Gujarat Value Added Tax Act, 2013 - Held that: - the applicant has rendered professional services for the purpose of getting registration numbers from the office of the Commissioner of Commercial Taxes, and no material at this stage is brought to the notice of the Court to point out that the applicant had gained anything on the basis of the false registration taken in the name of fake Firms from the office of the Commissioner of the Commercial Taxes, finds that the discretion deserves to be exercised in favor of the applicant under Section 438 of the Code - without prejudice to the right of the accused to seek stay against an order of remand, if ultimately granted, and the power of the learned Magistrate to consider such a request in accordance with law. It is clarified that the applicant, even if, remanded to the police custody, upon completion of such period of police remand, shall be set free immediately, subject to other conditions of this anticipatory bail order - applicant to be released on bail - application for bail disposed off. Issues: Bail application under Section 438 of the Code of Criminal Procedure, 1973 for offenses under IPC and Gujarat Value Added Tax Act.Analysis:1. Bail Application under Section 438 of the Code of Criminal Procedure:The applicant filed a bail application under Section 438 of the Code of Criminal Procedure seeking release in case of arrest in connection with FIR CR No. I07 of 2016. The offenses alleged include Sections 406, 409, 420, 467, 468, 471, 474, 120(B) of the Indian Penal Code along with sections of the Gujarat Value Added Tax Act, 2013.2. Applicant's Contentions:The applicant, an advocate practicing as a tax consultant, argued that he only provided professional assistance for firm registrations and did not engage in any illegal activities. He cooperated with the investigating officer by appearing twice for questioning and expressed willingness to continue cooperation. The applicant urged the court to grant bail under Section 438 of the Code.3. Respondent's Arguments:The respondent, through the learned APP, alleged that the applicant caused significant loss to the public exchequer by creating fake firms and obtaining registrations. Due to the ongoing investigation and the substantial loss incurred by the government, the respondent opposed granting bail under Section 438 of the Code at that stage.4. Court's Decision:After hearing both parties and examining the police papers, the court noted that the applicant provided professional services for obtaining registration numbers without any evidence of gaining from false registrations. Consequently, the court found it appropriate to exercise discretion in favor of the applicant under Section 438 of the Code, granting him bail.5. Bail Conditions:The court allowed the application and ordered the applicant's release on bail upon arrest, subject to conditions. These conditions included cooperating with the investigation, attending the police station as required, not misusing liberty, not obstructing the investigation, providing address details, and surrendering passports if applicable.6. Remand and Judicial Custody:The court clarified that the investigating agency could seek remand if necessary, and the applicant must appear before the magistrate as directed. The order did not prevent the accused from seeking a stay against remand if granted, with the magistrate having the authority to consider such requests in accordance with the law.7. Trial Court Proceedings:The court directed that the observations made during the bail order should not influence the trial court. The rule was made absolute, and the application was disposed of accordingly, with direct service permitted.