2025 (11) TMI 1928 - SC - GST

Bail Granted After Eleven Months Custody Where Evidence Is Seized, Witness Tampering Risk Low, Offence Triable by Magistrate

Gulam Fareed And Yash Chandani Versus State of Rajasthan, Union Of India.

SC allowed the appeals and set aside the impugned order rejecting bail. It noted that the prosecution's key witnesses are departmental tax officers, ... Rejection of bail application - charge sheet filed - prosecution continued with further investigation since it has come into possession of materials which necessitates filing of a supplementary chargesheet - HELD THAT:- It is not in dispute that the witnesses who are proposed to be examined to drive home the charges against the appellants are none other than the officers of the relevant tax department. Question of influencing the witnesses, if released on bail, is thus remote. That apart, in a case of the present nature, the evidence to be relied on by the prosecution is essentially documentary and electronic which, as per the charge sheet, have been seized - Question of tampering of evidence, therefore, is not likely to arise. Further, the case is triable by a magistrate and if at all the appellants are convicted of the charges, that would carry a maximum punishment of five years of imprisonment. Lastly, the appellants have been in custody for a little less than eleven months. The pre-trial detention of the appellants may not be required and that the appeals deserve acceptance - the impugned order is set aside - appeal allowed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether, in a prosecution for offences under Section 132 of the Central Goods and Services Tax Act, 2017, continued pre-trial detention is justified after filing of the charge sheet, in light of the nature of evidence, category of witnesses, stage of investigation, maximum prescribed sentence, and period of custody. 2. ISSUE-WISE DETAILED ANALYSIS 2.1 Bail in prosecution under Section 132 of the Central Goods and Services Tax Act, 2017 (a) Legal framework (as considered) 2.1.1 The Court proceeded on the basis that the appellants are accused of offences under Section 132 of the Central Goods and Services Tax Act, 2017; that a police report (charge sheet) under Section 193 of the Bharatiya Nyaya Suraksha Sanhita, 2023 had been filed; and that further investigation was continuing for a prospective supplementary charge sheet. (b) Interpretation and reasoning 2.1.2 The Court noted the High Court's reasoning that the appellants were allegedly involved in a systematic network to evade tax, and that tax collection is the lifeline of the country, with tax evasion amounting to denial of opportunity of growth to citizens; on that basis, the High Court had refused bail by emphasizing the seriousness of the offence and supporting evidence collected. 2.1.3 The Court examined the nature of the proposed witnesses and found that they are officers of the relevant tax department, rendering the possibility of influencing witnesses, if the appellants are released on bail, as remote. 2.1.4 The Court observed that, in a case of this nature, the prosecution evidence is essentially documentary and electronic, which, according to the charge sheet, had already been seized; therefore, the likelihood of tampering with evidence was considered not significant. 2.1.5 The Court further considered that the case is triable by a Magistrate and that, even in case of conviction, the maximum punishment prescribed is five years' imprisonment. 2.1.6 The Court took into account that the appellants had already been in custody for a little less than eleven months by the time of consideration of bail. 2.1.7 Weighing these factors cumulatively - the documentary and electronic nature of evidence, seizure of such material, the official status of witnesses, the limited maximum sentence, the Magistrate's jurisdiction, and the substantial pre-trial custody already undergone - the Court concluded that the seriousness of the allegation and the ongoing further investigation by themselves did not warrant continued pre-trial incarceration. (c) Conclusions 2.1.8 The Court held that, in the facts and circumstances of the case, further pre-trial detention of the appellants was not required. 2.1.9 The impugned order refusing bail was set aside, and the appellants were directed to be released on bail on such terms and conditions as the trial court may impose. 2.1.10 The Court clarified that any breach of the bail conditions, including unjustified absence from trial proceedings, would entitle the trial court to cancel bail and pass appropriate orders. 2.1.11 The Court expressly stated that the observations made while granting bail shall not be treated as findings on the merits of the case.