2020 (11) TMI 531 - DSC - Service Tax

Court eases bail terms, removes surety deposit, reduces amount to 15%. Emphasizes fairness and presumption of innocence.

CGST Versus Arindam Chaudhuri

The court modified the bail conditions by setting aside the requirement for sureties to deposit FDRs and reducing the deposit condition to 15% of the ... Grant of Bail - Service Tax Evasion - The applicant/accused is also reported to be involved in multiple other economic offences. - requirement to deposit FDR as surety, as a pre-requisite for release on bail - case involving duty evasion of ₹ 22 crores - It is submitted that considering the antecedents of the applicant/accused, his chances of fleeing are very high and therefore the conditions imposed by the Ld. ACMM are not only just but mandatory for ensuring the presence of the accused during the course of trial - HELD THAT:- There is no provision under CrPC making it obligatory for the surety to deposit the FDRs to secure the release of the accused on bail. The surety merely owes a duty to ensure the presence of the accused during the course of trial failing which he shall be liable for payment of penalty u/s 446 CrPC. Towards this end, the Magistrate is competent to enquire into the soundness of the surety but directing him to deposit FDR in the sum of ₹ 50.0 lacs, besides furnishing the surety bonds, is not the expection of the law from the surety. Even otherwise also, the condition sounds very harsh and onerous as a considerable amount i.e. around ₹ 50.0 lacs, of the sureties shall lie locked for an indefinite period of time as nobody can predict the date of disposal of the case against the applicant/accused. Consequently, the requirement of furnishing FDR by the surety needs to be set aside. It is a settled proposition of law that in matters relating to bail, economic offences constitutes a separate and distinct class. In the case at hand, the applicant/accused is alleged to be involved in a case of service tax evasion to the tune of ₹ 22, 71,07,389/-. The applicant/accused is also reported to be involved in multiple other economic offences. Off late, a trend amongst persons involved in economic offences fleeing abroad is a cause of concern for the entire nation. Considering the past criminal antecedents of applicant/accused and the nature of allegations in the present case, his chances of fleeing from the course of justice are apparently very high and the concern of the Ld. ACMM while imposing condition no. 2 cannot be brushed aside lightly - the impugned condition is modified to the extent that the applicant/accused shall deposit 15% of the total amount involved in the present case i.e. ₹ 22,41,07,389/- by way of an FDR in the court as a pre-requisite for grant of bail. The bail order dated 12.10.2020 accordingly stands modified. Application allowed in part. Issues Involved:1. Modification of bail conditions imposed by the Ld. ACMM.2. Reasonableness of the condition to deposit 25% of the amount involved.3. Requirement for sureties to deposit FDRs.Issue-wise Detailed Analysis:1. Modification of Bail Conditions Imposed by the Ld. ACMM:The applicant/accused sought modification of the bail order dated 12.10.2020, specifically challenging conditions I and II. Condition I required the accused to furnish personal bonds with two sureties of Rs. 25 lacs each and deposit the FDR of the said amount. Condition II required the accused to deposit 25% of the amount involved in the case, i.e., Rs. 22,41,07,387/-, with the department as a prerequisite for bail.2. Reasonableness of the Condition to Deposit 25% of the Amount Involved:The applicant argued that the condition to deposit 25% of the amount involved was contrary to the provisions of the Finance Act, 1994, and Article 265 of the Constitution of India, deeming it unreasonable and not permissible under law. The applicant further contended that the department's demand under Section 78-A of the Finance Act capped the maximum penalty at Rs. 1 lakh, making the bail condition excessively harsh.3. Requirement for Sureties to Deposit FDRs:The applicant also challenged the requirement for sureties to deposit FDRs of Rs. 25 lacs each, arguing it was difficult to comply with and overly burdensome.Court's Analysis and Judgment:On the Reasonableness of Bail Conditions:The court considered Section 437 CrPC, which allows imposing conditions for bail but mandates that such conditions must not be arbitrary, fanciful, or excessively harsh. The court referenced the Supreme Court judgments in Sumit Mehta v. State (NCT of Delhi) and Kunal Kumar Tiwari v. State of Bihar, emphasizing that bail conditions should advance the trial process and not be onerous or unreasonable.On the Requirement for Sureties to Deposit FDRs:The court observed that there is no provision under CrPC obligating sureties to deposit FDRs for securing the release of the accused on bail. The surety's duty is to ensure the accused's presence during the trial, and directing the surety to deposit FDRs of Rs. 50 lacs was deemed excessively harsh and not in line with legal expectations. Consequently, this condition was set aside.On the Condition to Deposit 25% of the Amount Involved:While acknowledging the seriousness of economic offences and the accused's criminal antecedents, the court recognized the need to balance the presumption of innocence and the right to liberty against societal expectations of a fair trial. The court modified the impugned condition, reducing the deposit requirement to 15% of the total amount involved, i.e., Rs. 22,41,07,387/-, as an FDR in court.Conclusion:The court modified the bail order dated 12.10.2020, setting aside the requirement for sureties to deposit FDRs and reducing the deposit condition to 15% of the amount involved. The application was disposed of accordingly, and the order was directed to be uploaded on the court website immediately.