2025 (4) TMI 61 - SC - GST

Bail allowed under Section 439 CrPC for offence Section 132(1)(c) CGST Act on personal bond ?1,00,000 plus two ?50,000 sureties

SC allowed the applicant/accused's bail under Section 439 CrPC in an offence under Section 132(1)(c) CGST Act. The Court ordered release on execution of a ... Cancellation of bail granted - offence punishable under Section 132(1)(c) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The present bail application under Section 439 of the Code of Criminal Procedure, produced on behalf of the Applicant/Accused -Gautam Garg son of Sri Rajesh Garg, aged 21 years, Resident of Shop No.20,New Dhan Mandi, Hanumangarh and Permanent Resident of House No.194, New Anaj Mandi, Hanumangarh, Rajasthan- 335513, is hereby allowed and it is ordered that if on behalf of applicant/accused upon submitting his personal bond of Rupees One Lakh, along with satisfactory two sureties of Rupees Fifty-Fifty Thousand before the trial court with the fulfilment of conditions imposed - bail application allowed. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment are:Whether the High Court was justified in cancelling the bail granted to the appellant by the trial court under Section 132(1)(c) of the Central Goods and Services Tax Act, 2017.Whether the appellant, being a Manager in the company, could be held liable under the allegations made pursuant to the crime registered.Whether the conditions imposed by the trial court for granting bail were adequate to ensure the appellant's cooperation with the investigation and prevent any interference with the prosecution's case.ISSUE-WISE DETAILED ANALYSIS1. Justification of Bail Cancellation by the High Court- Relevant Legal Framework and Precedents: The primary legal framework involves Section 132(1)(c) of the CGST Act, which pertains to the punishment for certain offenses related to tax evasion. The procedural aspect is governed by the Code of Criminal Procedure, particularly Section 439, which deals with the power to grant bail.- Court's Interpretation and Reasoning: The Court evaluated whether the High Court appropriately exercised its discretion in cancelling the bail. It considered the appellant's role as a Manager and the seriousness of the allegations under the CGST Act.- Key Evidence and Findings: The appellant was initially granted bail by the trial court, which was later cancelled by the High Court. The Supreme Court had previously remanded the matter for reconsideration, highlighting the need for a balanced approach.- Application of Law to Facts: The Court assessed the appellant's role and the nature of allegations, determining that the trial court's decision to grant bail was justified given the appellant's position and the conditions imposed.- Treatment of Competing Arguments: The appellant argued that his role as a Manager did not warrant severe allegations, while the respondent emphasized the seriousness of the charges. The Court balanced these arguments, focusing on the appellant's cooperation with the investigation.- Conclusions: The Court concluded that the High Court's cancellation of bail was not justified and that the trial court's order should be restored.2. Appellant's Liability as a Manager- Relevant Legal Framework and Precedents: The liability under Section 132 of the CGST Act involves the assessment of the individual's role and participation in the alleged offenses.- Court's Interpretation and Reasoning: The Court considered the appellant's position as a Manager and whether this role implicated him in the alleged tax evasion offenses.- Key Evidence and Findings: The evidence did not conclusively demonstrate the appellant's direct involvement in the offenses, supporting the trial court's decision to grant bail.- Application of Law to Facts: The Court applied the legal standards for bail, emphasizing the lack of direct evidence against the appellant and his role in the company.- Treatment of Competing Arguments: The appellant's defense focused on his managerial role, while the prosecution highlighted the severity of the offense. The Court found merit in the appellant's argument, given the lack of direct evidence.- Conclusions: The Court determined that the appellant's role did not justify the cancellation of bail, supporting the trial court's initial decision.3. Adequacy of Bail Conditions- Relevant Legal Framework and Precedents: The conditions for bail under Section 439 of the Code of Criminal Procedure aim to ensure the accused's cooperation and prevent interference with the investigation.- Court's Interpretation and Reasoning: The Court evaluated whether the conditions imposed by the trial court were sufficient to address the prosecution's concerns.- Key Evidence and Findings: The trial court imposed conditions requiring the appellant to cooperate with the investigation, refrain from tampering with witnesses, and not leave the country without permission.- Application of Law to Facts: The Court found these conditions appropriate and adequate to ensure the appellant's compliance with legal proceedings.- Treatment of Competing Arguments: The prosecution sought stricter measures, while the defense argued for maintaining the trial court's conditions. The Court sided with the defense, emphasizing the adequacy of the existing conditions.- Conclusions: The Court upheld the trial court's conditions as sufficient to ensure the appellant's cooperation and prevent any potential interference with the investigation.SIGNIFICANT HOLDINGS- Preserve Verbatim Quotes of Crucial Legal Reasoning: The Court stated, 'Considering the facts on record, in our view, the case for bail is made out.'- Core Principles Established: The judgment reinforced the principle that bail should not be cancelled without substantial justification, particularly when the accused's role and the conditions imposed are appropriately balanced.- Final Determinations on Each Issue: The Court allowed the appeal, setting aside the High Court's order and restoring the trial court's decision to grant bail, subject to the conditions initially imposed.