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of <h1>Regular bail denied in GST evasion case involving Rs.6.14 crore tax fraud through suppressed turnover</h1> <h3>BADHA RAM Versus INTELLIGENCE OFFICER, STATE OF KERALA</h3> BADHA RAM Versus INTELLIGENCE OFFICER, STATE OF KERALA - 2024 (80) G. S. T. L. 353 (Ker.) Issues Involved:1. Application for regular bail under Section 439 of the Code of Criminal Procedure.2. Allegations of tax evasion under Section 132(1) of the Kerala State Goods and Service Act, 2017.The petitioner, a wholesale distributor of mobile accessories and electronic items, is accused of evading tax payment by supplying goods without issuing invoices, leading to an estimated tax evasion of 6.14 crores. The petitioner's defense includes being a registered dealer regularly paying returns, disputing the inclusion of income from other concerns, and asserting innocence based on proper documentation of transactions. The petitioner's counsel argues that arrest should only follow assessment, citing relevant case law from Madras and Madhya Pradesh High Courts.The prosecution presents evidence of significant tax evasion by the petitioner, alleging suppression of actual taxable supplies and evasion of over 6 crores. The prosecution opposes bail, citing ongoing investigation, dismissal of staff, and potential evidence tampering by the petitioner. The prosecution argues that arrest can be made before assessment under Section 132(5) of the GST Act, emphasizing the seriousness of the offenses and the need for continued detention to prevent interference with the investigation.The court notes the petitioner's registration under GST, the alleged evasion of tax through unrecorded transactions, and the suppression of turnover leading to a substantial tax liability. The court rejects the petitioner's argument that arrest should follow assessment, emphasizing that certain offenses under the GST Act do not require completed assessment for prosecution. The court upholds the prosecution's contention that continued custody is necessary to prevent evidence tampering and influence on witnesses, given the seriousness of the alleged offenses and the early stage of the investigation.In conclusion, the court denies the bail application, considering the substantial alleged tax evasion, the ongoing investigation, and the need to prevent interference with evidence or witnesses. The court emphasizes that arrest powers can be exercised to ensure a proper investigation and prevent tampering with evidence, especially in cases involving significant financial implications and potential witness influence.
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