2022 (9) TMI 990 - HC - GST

Anticipatory Bail Granted in Tax Evasion Case: No Direct Evidence Found Against Petitioner Despite Allegations

HC granted anticipatory bail in tax evasion case involving allegations against petitioner and his father. Despite respondent's claims of non-cooperation, ... Grant of Anticipatory Bail - evasion of tax - Section 132(1)(a) (f)(h)(j) & (k) r/w Section 132 (1)(I)(i) of Central Goods and Service Tax Act, 2017 and Section 20 of Integrated Goods and Service Tax Act - HELD THAT:- It is revealed that the main allegation with regard to tax evasion is against the father of the petitioner i.e. Anil Kumar Arora who allegedly cleared goods without issuance of e-way bill and payment of GST and evaded crores of tax. The only allegation against the present petitioner is that he is an active accomplice to his father accused Anil Kumar Arora, however no prima facie case is made out against the present petitioner with regard to tax evasion. So far as the orders passed by co-ordinate Bench of this Court relied upon by counsel for the respondent are concerned, the accused were directly involved in tax evasion. It is well settled that the power exercisable under Section 438 Cr.P.C. is somewhat extraordinary in character and it can be invoked in cases where there are reasonable grounds for holding that a person accused of an offence is not likely to abscond, or otherwise misuse his liberty while on bail. Considering the fact the petitioner is a young man pursuing his studies, this Court is of the opinion that it is a fit case for grant of anticipatory bail to the petitioner under Section 438 Cr.P.C. However, it is expected from him to observe and follow the fundamental duties of a good citizen as enshrined in Article 51-A of the Constitution of India - Bail application allowed, subject to conditions imposed. Issues:Anticipatory bail application under Section 438 Cr.P.C. in connection with alleged tax evasion under Central Goods and Service Tax Act, 2017 and Integrated Goods and Service Tax Act.Analysis:The petitioner filed an anticipatory bail application apprehending arrest in connection with a complaint of tax evasion. The petitioner's counsel argued that he is being falsely implicated due to being the son of a co-accused and that no evidence connects him to the alleged crime. It was emphasized that no assessment order or demand has been raised against the petitioner. Reference was made to relevant legal provisions and previous court decisions supporting the petitioner's innocence and cooperation in the investigation.The respondent, representing the Union of India, opposed the bail application, alleging that the petitioner was an active accomplice in evading tax with his father, amounting to Rs. 7.97 crores. It was claimed that the petitioner failed to cooperate with the investigation despite multiple summons and that there are grounds for arrest under Section 69 of the GST Act. Previous court decisions were cited to support the opposition to the bail application.Upon reviewing the complaint, the court noted that the main allegation of tax evasion was against the petitioner's father, with the petitioner being accused of being an accomplice. However, the court found no prima facie case against the petitioner regarding tax evasion. The court highlighted the extraordinary nature of the power under Section 438 Cr.P.C. and granted anticipatory bail to the petitioner, considering his young age and pursuit of studies. The court imposed specific conditions for the bail, emphasizing the petitioner's duty as a good citizen under the Constitution of India.In conclusion, the court allowed the bail application for the petitioner, directing his release upon arrest in connection with the complaint of tax evasion. The petitioner was required to furnish a personal bond and sureties, along with complying with conditions such as making himself available for interrogation, refraining from influencing witnesses, and seeking court permission before leaving India.