2022 (4) TMI 1346 - SCH - GST

Bail Granted to Salaried Director in GST Case Without Section 74 Notice Despite Completed Investigation and Filed Charge Sheets

The SC granted bail to a salaried Director in a GST case where no notice under Section 74 of the GST Act had been issued to quantify the alleged 200 crore ... Seeking Grant of Bail - appellant is a salaried Director of the company - payment of ₹ 200 crore as a condition of bail - payment through the assets of the Company - HELD THAT:- What is most material is that no notice has been issued to the Company under Section 74 of the GST Act, 2017 which could have resulted in quantification of the amount. Thus on the one hand the charge sheet has been filed but on the other hand no process for quantification of the amount has taken place. The proceedings commenced in October, 2021. The appellant has been charged in the third charge sheet filed. Thus, obviously investigation is over. The bail is granted to the appellant on terms and conditions to the satisfaction of the trial Court - appeal disposed off. Issues: Bail granted to a salaried Director in a case involving non-issuance of notice under Section 74 of the GST Act, 2017 for quantification of amount. Clarification made regarding the order not setting a precedent for anticipatory bail to the Managing Director.Analysis:1. Bail Granted to Appellant:The appellant, a salaried Director of the company since 2019, sought bail in a case involving the payment of &8377; 200 crore as a condition of bail for another individual. The appellant's counsel argued that the amount was paid through the company's assets. The Court noted the absence of a notice issued to the Company under Section 74 of the GST Act, 2017 for quantification of the amount, despite the filing of a charge sheet. The investigation had concluded with the filing of the third charge sheet against the appellant in October 2021. Consequently, the Court granted bail to the appellant based on the lack of quantification of the amount and the completion of the investigation.2. Clarification on Precedent:In response to the learned ASG's insistence, the Court clarified that the bail granted to the appellant should not be considered a precedent for anticipatory bail to a Managing Director. The Court emphasized that the decision regarding anticipatory bail for a Managing Director would be determined based on its unique circumstances and would not be influenced by the current order. By providing this clarification, the Court ensured that the specific circumstances of each case, especially concerning different positions within a company, would be considered independently in bail matters.3. Disposition of the Appeal:The Court, after considering the arguments presented by both parties, disposed of the appeal by granting bail to the appellant on terms and conditions to be determined by the trial Court. The order effectively concluded the matter by addressing the specific issue of bail for the appellant in light of the absence of a notice under Section 74 of the GST Act, 2017 for quantification of the amount. The Court's decision to dispose of the appeal signified the resolution of the immediate legal matter at hand, providing clarity on the bail status of the appellant in the case.