2022 (4) TMI 812 - DSC - GST

Anticipatory Bail Denied in Rs. 10 Crore GST Evasion Case Involving Uninvoiced Betel Nut Supply for Pan Masala Manufacturing

The HC dismissed an anticipatory bail application related to GST evasion of approximately Rs. 10 crores involving supply of betel nuts for manufacturing ... Seeking grant of anticipatory Bail - ready mix material of Pan Masala or Guthka - it has been alleged against the accused that accused supplied huge quantity of ready mix of pan masala and guthka (a banned product) valued in crores of rupees to late Sh. Manoj Kumar Dudhoria without issuance of invoices and received payment in cash - HELD THAT:- It is evident that there is no planning of the arrest of the accused in this case as no approval as such has been taken and even the proposal has not been made to arrest the accused. Moreover, as stated by Ld. Counsel for the accused that accused has once joined the investigation on the notice of the department somewhere in August/September 2021 and thereafter, no notice from the side of the respondent has been issued to the applicant to join the investigation. On being asked from the Ld. Counsel about the immediate apprehension of his arrest, except the apprehension that one of the accused Manoj Kumar Dudhoria has expired and accused may not meet the same fate. There is nothing to show that co-accused was died in the custody and merely having such apprehension without any basis cannot be regarded as apprehension of arrest and moreover department itself is not making any effort to arrest the accused. Thus, no ground for anticipatory bail is made out, hence the application is dismissed. Issues:1. Bail application on the ground of false implication.2. Liability of GST and evasion of tax.3. Anticipatory bail application based on lack of immediate arrest apprehension.4. Applicability of relevant judgments in the case.Issue 1: Bail application on the ground of false implication:The defence counsel argued for bail, stating the accused was falsely implicated and had no involvement in manufacturing ready mix material of Pan Masala or Guthka. The applicant's business was limited to supplying betel nuts to Manoj Kumar Dudhoria. The absence of a ready mix machine at the applicant's premises was highlighted. The defence also mentioned that the deceased had GST liability, not the applicant. They contended that the applicant's son's statement was obtained under coercion. However, the court found no basis for the apprehension of arrest, especially since the department was not actively pursuing the accused.Issue 2: Liability of GST and evasion of tax:The Special Public Prosecutor (SPP) argued that the case involved a significant GST liability of over Rs. 38 crores and emphasized the need for the accused to cooperate in the investigation. Allegations included supplying banned products without invoices, evading GST of approximately Rs. 10 crores, and aiding in clandestine activities. The DGGI clarified that no approval for arrest had been sought or granted, indicating a lack of immediate action planned against the accused.Issue 3: Anticipatory bail application based on lack of immediate arrest apprehension:The court noted that the accused failed to demonstrate any concrete basis for fearing immediate arrest. Despite ongoing investigations and evidence suggesting GST evasion, there was no indication of imminent arrest. The court deemed the application premature due to the absence of a credible apprehension of arrest and dismissed the bail plea.Issue 4: Applicability of relevant judgments in the case:Both the defence counsel and the SPP cited various judgments to support their arguments. The defence relied on cases of false implication and coercion, while the SPP referenced precedents emphasizing the need for cooperation in investigations. The court considered these references but ultimately based its decision on the specific circumstances of the case, finding no grounds for anticipatory bail due to the lack of immediate arrest threat and premature nature of the application.In conclusion, the court dismissed the anticipatory bail application, emphasizing the absence of a valid apprehension of arrest and the ongoing investigation without imminent arrest plans. The case highlighted the importance of concrete evidence and credible grounds for seeking anticipatory bail, beyond mere apprehensions or references to legal precedents.