2021 (2) TMI 1108 - HC - Indian Laws

Anticipatory Bail Denied in Tax Evasion and Corruption Case; Court Stresses Need for Custodial Interrogation.

The HC denied anticipatory bail to the petitioners involved in tax evasion, bribery, and corruption under IPC and the Prevention of Corruption Act, 2018. ... Seeking grant of Anticipatory Bail - allegation of Receipt of Monthly Bribe - Tax officers - It was alleged that the tax was being evaded by ensuring that there was no checking or verification of the documents or goods, while being transported to and from the State of Punjab - alleged register maintained by the Munshi cannot be looked into for the purpose of implicating the petitioner in the said FIR as there is no proof regarding the fact whether these books were maintained in the regular course of business nor is there any certificate to that effect - non-compliance of Section 17A of the Prevention of Corruption Act as amended - HELD THAT:- In the celebrity judgment of Devender Kumar vs. CBI [2019 (1) TMI 1665 - DELHI HIGH COURT], it has been held that by incorporating Section 17A as it reads by itself, the intention of the Legislature was to protect the public servants in the bona fide discharge of their official functions or duties. It was further held that when act of a public servant is ex facie criminal or constitutes an offence, prior approval of the Government would not be necessary. Section 17A would be applicable to cases where offense is relateable to any recommendation made or decision taken. Thus, it would not be necessary by the respondent-State to have obtained prior approval of the State Government before initiating enquiry or investigation in the said matter. The bar to enquiry or investigation under Section 17A of the Prevention of Corruption Act is apropos such alleged offence, as may be relatable to any recommendation made or decision taken by a public servant in discharge of his official functions or duties. In the present case, there is no recommendation or decision on record by a public servant in the discharge of his official functions or duties. No doubt the personal liberty of the petitioners is at stake, as stated while praying for anticipatory bail, but in the instant case the custodial interrogation would be required to unearth the nexus between the petitioners and the intermediaries, as well as the amount of tax evasion involved in its entirety. The complicity of the petitioners herein as alleged would be revealed and fortified only with further investigation, for which as a necessary corollary custodial interrogation of the petitioners would be required - In the case in hand, there has to be a deviation from normal rule of bail rather than jail, since the allegations and prima facie investigation revealed that there was evasion of tax at a very large-scale and officials were being paid bribes on a monthly basis. The investigation is at a very nascent stage regarding the role of the petitioners herein. The petitioners are also persons of influence and would be in a position to scuttle a proper investigation. Bail cannot be granted - petition dismissed. Issues:- Anticipatory bail in a case involving tax evasion, bribery, and corruption charges under IPC and Prevention of Corruption Act, 2018.Analysis:1. Facts and Allegations:- Two Crl. Misc. Petitions were filed arising from an FIR regarding tax evasion by a transport owner in connivance with Excise and Taxation Department officials, leading to bribery and loss to the State Exchequer.- Petitioners sought anticipatory bail under Section 438 Cr.P.C. after dismissal of their previous petitions.2. Petitioner's Arguments:- Petitioner in CRM-M No.41913 claimed false implication, absence of direct evidence of illegal gratification, and delay in his nomination as an accused.- Petitioner in CRM-M No.37721 challenged the sustainability of FIR, denial of being posted as an ETO, and questioned the admissibility of register entries as evidence.3. Legal Arguments:- Petitioners argued non-compliance with Section 17A of the Prevention of Corruption Act, necessity of prior approval for investigation, and absence of demand or acceptance of illegal gratification.- Cited judgments from Delhi, Rajasthan, and Kerala High Courts to support their contentions.4. State's Arguments:- State contended that petitioners were rightly accused based on disclosures during investigation, call details, and register entries indicating illegal gratification.- Mentioned involvement of multiple officers, surveillance data, and specific bribe amounts paid to officials.5. Court's Decision:- Court observed ongoing investigation, reliance on register for establishing petitioner's role, and the necessity of custodial interrogation for uncovering the nexus and extent of tax evasion.- Rejected anticipatory bail, citing the seriousness of allegations, potential influence of petitioners, and the need for further investigation to establish complicity.- Emphasized that observations were limited to bail application and not indicative of case merits.6. Legal Analysis:- Court addressed arguments on admissibility of evidence, compliance with statutory provisions, and the significance of custodial interrogation in complex cases involving financial crimes and corruption.- Referred to precedents from various High Courts to support the decision on the application of Section 17A and the necessity of prior approval for certain investigations.7. Conclusion:- Denied anticipatory bail to petitioners due to the gravity of allegations, ongoing investigation, and the potential impact of their influence on the process.- Stressed the importance of custodial interrogation for uncovering the truth in cases involving tax evasion, bribery, and corruption, highlighting the need for a thorough investigation.