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Issues: (i) Whether the petitioner's arrest and continued custody were unjustified in view of the statutory scheme under the GST enactments and the pending adjudication of tax liability; (ii) Whether, on the facts and circumstances, the petitioner was entitled to regular bail.
Issue (i): Whether the petitioner's arrest and continued custody were unjustified in view of the statutory scheme under the GST enactments and the pending adjudication of tax liability?
Analysis: The complaint arose from allegations of wrongful availment and utilisation of input tax credit through suspicious or nonexistent suppliers. The power of arrest under Section 69 of the Haryana Goods and Services Tax Act, 2017 is linked to offences under Section 132, but the Court noted that the exact tax liability and the amount of wrongful credit were still to be determined through adjudication under Section 74(1). Relying on the reasoning that criminal liability and the severity of punishment are linked to quantified tax evasion, the Court treated adjudication as material to the final determination of the alleged offence.
Conclusion: The issue was answered in favour of the petitioner to the extent that the alleged criminal liability was held to be premature before adjudication of tax liability.
Issue (ii): Whether, on the facts and circumstances, the petitioner was entitled to regular bail?
Analysis: The Court considered that the petitioner had been in custody for several months, had no criminal antecedents, had a permanent abode, and was not shown to be a flight risk. Investigation had been completed and the complaint had already been filed, while the adjudication under Section 74(1) remained pending. The Court also took into account the maximum punishment prescribed for the alleged offence and the likelihood that the trial would take time.
Conclusion: Regular bail was granted to the petitioner.
Final Conclusion: The petition succeeded and the petitioner was ordered to be released on regular bail, subject to the conditions imposed by the Court.
Ratio Decidendi: Where prosecution for GST offences is closely dependent on quantification and adjudication of alleged tax evasion, and the accused is not shown to pose a flight risk or other exceptional circumstances justifying custody, regular bail may be granted pending adjudication and trial.
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