2017 (2) TMI 1020 - HC - VAT and Sales Tax

Denial of Anticipatory Bail: Fraud Allegations Upheld

PIRARAM CHAMNARAM KALABI Versus STATE OF GUJARAT

The court denied the application for anticipatory bail under Section 438 of the Code, citing the seriousness of the allegations and the potential ... Anticipatory bail - offence punishable u/s 465, 467, 468 and 471 of the IPC and u/s 85(1) (J) of the GVAT - Government is defrauded in the matter of Value Added Tax by forging the Challans used for payment of tax - Held that: - the complicity of the applicant and other persons like the brother of the applicant Narsinhbhai Patel prima-facie appear, as per the allegations made in the FIR in the matter of defrauding the State to the extent of approx ₹ 15,40,910/- - the police might require custodial interrogation of the applicant and therefore the applicant could not be made entitle to benefit of anticipatory bail u/s 438 of the Code in connection with the FIR - application rejected. Issues:Application for anticipatory bail under Section 438 of the Code of Criminal Procedure in connection with FIR alleging offenses under Sections 465, 467, 468, and 471 of the Indian Penal Code and Section 85(1)(J) of the Gujarat Value Added Tax Act.Analysis:The applicant sought anticipatory bail, claiming innocence and attributing the alleged fraudulent activities to his accountant. The FIR accused the applicant of defrauding the government in VAT matters by forging tax payment challans. The applicant's advocate argued that the applicant, a reputable businessman, entrusted tax payments to his accountant, who manipulated the challans without the applicant's knowledge. The defense contended that the applicant did not engage in illegal activities to defraud the government.During the investigation, it was revealed that the challans presented for tax payment were manipulated by adding extra amounts after initial small payments. The investigating officer collected evidence showing discrepancies in the tax amounts paid and the figures on the challans. The accountant, in his statement, mentioned receiving filled challans from a relative of the applicant and depositing tax amounts accordingly. The accountant's statement implicated the applicant and his relative in defrauding the state government of a substantial sum.Considering the seriousness of the allegations, the court found that custodial interrogation of the applicant might be necessary. Therefore, the court rejected the application for anticipatory bail under Section 438 of the Code. The court noted the modus operandi of preparing challans for small tax amounts, manipulating them to show higher payments, and presenting them to tax authorities. The involvement of the applicant and his relative in defrauding the state government was deemed prima facie evident based on the allegations in the FIR. The court discharged the rule and vacated any interim relief granted.The applicant's request to continue interim relief was opposed by the learned APP, and the court's decision to reject the application for anticipatory bail was upheld. The judgment emphasized the need for custodial interrogation due to the nature and gravity of the allegations, indicating a likelihood of the applicant's involvement in the fraudulent activities as alleged in the FIR.