2022 (12) TMI 263 - SC - GST

Bail Granted in CGST Chewing Tobacco Evasion Case u/s 132(1) and 132(5) After Charge Sheet

SC allowed the SLP and granted bail to the accused in a prosecution under Section 132(1)(a), (h), (k), (l) read with Section 132(5) of the CGST Act, 2017, ... Grant of bail under Section 439 Cr.P.C. - offences under Section 132 of the Central Goods and Services Tax Act, 2017 - non-bailable and cognizable offence under GST - nature of evidence - documentary and electronic - risk of tampering, intimidating or influencing witnesses - custodial period and prejudice from continued incarceration - conditions of bail including deposit of passportGrant of bail under Section 439 Cr.P.C. - offences under Section 132 of the Central Goods and Services Tax Act, 2017 - nature of evidence - documentary and electronic - custodial period and prejudice from continued incarceration - conditions of bail including deposit of passport - Application for bail by the petitioner in proceedings under Section 132(1)(a),(h),(k) and (l) read with Section 132(5) of the Central Goods and Services Tax Act, 2017 was allowed subject to conditions. - HELD THAT: - The Court noted that the petitioner was arrested on 21.07.2022, the investigation is complete and a charge-sheet has been filed. Even if the alleged evasion falls within the penal provision providing imprisonment which may extend to five years, the petitioner had already undergone incarceration for more than four months and the trial would in any event take time. The prosecution's evidence is primarily documentary and electronic, with ocular evidence limited to official witnesses; consequently the risk of tampering, intimidation or influencing witnesses was not such as to outweigh the petitioner's entitlement to bail. Balancing these factors and the need to secure the petitioner's presence at trial, the Court found it appropriate to release the petitioner on bail subject to conditions to be imposed by the trial Court, including deposit of passport and other conditions to ensure participation in the trial. [Paras 6, 7]Petitioner released on bail subject to conditions to be imposed by the trial Court, including deposit of passport; petitioner to be produced before the trial Court forthwith.Final Conclusion: Special Leave Petition allowed. The petitioner is granted bail on conditions to be imposed by the trial Court (including deposit of passport) and is to be produced before the trial Court forthwith; pending applications disposed of. Issues:1. Bail application under Section 439 of Cr.P.C. dismissed by High Court.2. Allegations of clandestine transportation and evasion of tax under GST.3. Disputed tax amount and projected value of unmanufactured tobacco.4. Consideration of evidence and trial proceedings.5. Grant of bail with imposed conditions.Analysis:1. The petitioner approached the Supreme Court challenging the High Court's order dismissing the bail application under Section 439 of the Cr.P.C. related to alleged offences under the Central Goods and Services Tax Act, 2017 (GST).2. The allegations against the petitioner involve clandestine transportation of unmanufactured tobacco for the manufacture and supply of chewing tobacco without paying applicable duties and taxes. The prosecution contends a substantial tax amount of &8377;15,57,28,345 is involved, while the petitioner disputes this amount, arguing it should be significantly lower.3. The petitioner's senior counsel argued that the allegations are exaggerated to portray a non-bailable offence, aiming to prevent bail and secure custody. The respondent highlighted the transportation of a larger quantity of unmanufactured tobacco, emphasizing the need for evidence and trial proceedings to establish the facts.4. The Supreme Court refrained from delving into the merits of the case, recognizing that detailed examination should occur during trial proceedings. The court acknowledged the completion of investigation, filing of the charge sheet, and the petitioner's custody since July 2022, considering the potential imprisonment and fine under Section 132(1)(l)(i) of the GST Act.5. In granting bail, the court emphasized the need for the petitioner to comply with imposed conditions, including depositing the passport and actively participating in the trial. Given the documentary and electronic nature of evidence, with official witnesses providing testimonies, the court found no risk of tampering or influencing evidence. Consequently, the court directed the petitioner's release on bail, subject to conditions set by the trial court to ensure trial participation and compliance.This detailed analysis outlines the key issues addressed in the Supreme Court judgment, encompassing the bail application dismissal, contested tax amounts, trial considerations, and the subsequent grant of bail with specified conditions.