Petitioner Accused No.2 granted anticipatory bail in service tax evasion case

The Court granted anticipatory bail to the petitioner, accused No.2, in a case involving alleged evasion of service tax under Section 89(1)(a) of the Finance Act, 1994. Despite a history of non-appearance and a Non-Bailable Warrant issued against him, the petitioner was allowed bail upon submitting an undertaking to deposit an initial amount of Rs. 20,00,000 and ensuring regular appearance before the Court. The Court imposed stringent conditions, including continuous payment of the remaining tax and penalty, with a warning of bail cancellation for non-compliance.

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Issues:
Petition for anticipatory bail under Section 438 of Cr.P.C. for the offence under Section 89(1)(a) of Finance Act, 1994 - Alleged evasion of service tax - Non-appearance before the Court - Issuance of NBW - Submission of undertaking for payment and regular appearance.

Analysis:
The petitioner, accused No.2, filed a petition seeking anticipatory bail under Section 438 of Cr.P.C. for the offence under Section 89(1)(a) of Finance Act, 1994. The complaint alleged that the petitioner's firm evaded service tax amounting to Rs. 1,41,45,378 in contravention of relevant sections of the Act. It was stated that due to miscommunication and inadvertence, the petitioner did not appear before the Court, resulting in the issuance of a Non-Bailable Warrant (NBW) against him. The petitioner, through his counsel, expressed readiness to deposit Rs. 20,00,000 before the Court and assured regular payment of the remaining tax and penalty. The petitioner emphasized the difficulty in arranging funds if detained in jail, seeking bail on these grounds.

The Central Government Standing Counsel vehemently opposed the bail, labeling the petitioner as a chronic defaulter of service tax exceeding Rs. 1,41,45,378. The counsel argued that the petitioner's history of non-appearance and absconding for three years indicated a risk of further evasion if granted bail. The respondent contended that releasing the petitioner on anticipatory bail might lead to non-payment of the due amount. The Court carefully considered the arguments and reviewed the trial court's order.

Upon examination, it was found that the petitioner had not appeared before the lower court despite the NBW issued against him. However, the petitioner now assured the Court of regular appearances and a payment of Rs. 20,00,000 initially, followed by consistent payments. Considering the petitioner's undertaking and imposing stringent conditions, the Court deemed it appropriate to grant anticipatory bail to the petitioner. The Court ordered the petitioner to execute a personal bond, deposit Rs. 20,00,000 to the tax authorities within two weeks, appear regularly before the Court, continue depositing the due tax, and not leave the Court's jurisdiction without permission. Failure to comply with the conditions would result in automatic cancellation of the bail order.

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