2020 (12) TMI 940 - HC - GST

Court Grants Interim Bail with Conditions

SH RAGHAV AGARWAL Versus COMMISSIONER OF CENTRAL TAX AND GST DELHI NORTH

The court allowed the application, subject to exceptions, and directed the release of the applicant on interim bail with specific conditions. The case was ... Grant of Interim Bail - respondents have not been able to specify the offence committed by the applicant - HELD THAT:- Plainly, the issues involved in the present application require examination - A status report and the supplementary status report has been filed. Mr Gupta, learned senior counsel seeks time to examine the same and file response, if necessary. The applicant is directed to be released on interim bail on his furnishing a Personal Bond in the sum of ₹1 lakh with two sureties of the like amount to the satisfaction of the trial court/duty magistrate - List for hearing on 19.01.2021. Issues:1. Arrest of the applicant without specifying the offense committed.2. Allegations of availing fraudulent/inadmissible ITC.3. Lack of show cause notice and assessment proceedings before arrest.4. Prosecution without tax determination proceedings.5. Examination of issues involved in the application.Analysis:1. The applicant was arrested based on an Arrest Memo without a clear specification of the offense committed, as per section 132 of the Central Goods and Service Tax Act, 2017. The Arrest Memo alleged the commission of an offense without specifying the exact nature of the offense, raising concerns about the legality of the arrest.2. Allegations were made against the applicant regarding the fraudulent/inadmissible Input Tax Credit (ITC) amounting to a substantial sum. The initial amount mentioned in the letter was later claimed to have increased significantly, highlighting the seriousness of the allegations.3. It was noted that no show cause notice had been issued to the applicant, and no assessment proceedings had been initiated to determine the exact amount involved. Despite this, the applicant was arrested, and the respondent intended to proceed with prosecution without following the necessary procedural steps, such as issuing a show cause notice.4. The respondent argued that it was not mandatory to undertake proceedings for determining the tax due before launching prosecution for tax evasion. This raised questions about the procedural fairness and compliance with legal requirements in initiating prosecution without completing the assessment process.5. The court acknowledged the complexity and significance of the issues raised in the application, emphasizing the need for a thorough examination. Both parties were given the opportunity to submit written submissions on the matters at hand, indicating a fair and transparent judicial process.In conclusion, the court allowed the application, subject to exceptions, and directed the release of the applicant on interim bail with specific conditions. The case was listed for further hearing to delve deeper into the issues raised, ensuring a comprehensive and just resolution in accordance with the principles of law and procedural fairness.