TaxTMI 
TaxTMI 
2018 (7) TMI 589
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....I F. No. 29/KZU/KOL/GR.D/2018 dated 12.5.2018 under Section 132(1)(a), (b) and (c) of the Central Goods and Services Tax Act, 2017 whereby prayer of the petitioners to enlarge them on bail was turned down. Mr. K.K. Maity learned Advocate for Union of India opposite party herein submitted that the petitioner in CRM 3327 of 2018 Shri Sanjay Kumar Bhuwalka and in CRM 3328 of 2018 Neeraj Jain were arrested on 12.05.2018 due to their involvement in the business of generating and selling of fake tax invoices to various entities without supplying the underlying goods or services, thereby facilitating irregular availment and utilization of input tax credit by such entities to whom such fake invoices were issued. It is submitted that during investigation, it was revealed that M/s. Mecon Engineering Works, M/s. Amazonite Steel Pvt. Ltd., M/s. Corandum Impex Pvt. Ltd., M/s. Cuprite Marketing Pvt. Ltd. and M/s. Binky Exim Pvt. Ltd. were all part of a well thought out conspiracy aimed at duping the exchequer by way of creation of a complex web of inter-connected companies engaged in fraudulent issuance of tax invoices without supply of goods or services to enable the recipient companies to av....
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.... under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate; (b) Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station." Mr. Sekhar Basu, learned senior counsel for the petitioners stressed on the word reasons to believe appearing in section 69(1) of the Act contending that a Statute, be it of any nature, civil, criminal, quasi criminal or quasi civil has a definite destination to reach which in legal parlance is described as "attainment of the object for which the law has been enacted for" and to analyse the character of a statute, it has to be read as a whole and then and then only its true character and application can be understood. I do agree with such contention of Mr. Basu that the GST Act of 2017 is essentially a fiscal statute and the statement of object and reason has to be read together which is aimed at realization of revenue. Revenue is the monetary payment due to the government ....
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....f Haryana reported in 1993 Supp(2) Supreme Court Cases 497 at paragraph 4 of extract of the observation in the cited judgment which reads thus- "4. Under the Indian penal law, guilt in respect of almost all the offences is fastened either on the ground of "intention" or "knowledge" or "reason to believe". We are now concerned with the expressions "knowledge" and "reason to believe". "Knowledge" is an awareness on the part of the person concerned indicating his state of mind. "Reason to believe'" is another facet of the state of mind. "Reason to believe" is not the same thing as "suspicion" or "doubt" and mere seeing also cannot be equated to believing. "Reason to believe" is a higher level of state of mind. Likewise "knowledge" will be slightly on higher plane than "reason to believe". A person can be supposed to know where there is a direct appeal to his senses and a person is presumed to have a reason to believe if he has sufficient cause to believe the same. Section 26 I.P.C. explains the meaning of the words "reason to believe" thus: 26. "Reason to believe" - A person is said to have "reason to believe" a thing, if he has sufficient cause to believe that thing but not o....
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....the Additional Director General Goods and Service Tax Intelligence to consider all the materials available with regard to the accusations of commission of the offences mentioned in section 69 of the Act and come to his own conclusion for effecting arrest unhindered, unaffected by interference from any quarter. It is further contended that the entire exercise by the officers sub-ordinate to the Additional Director General Goods and Service Tax Intelligence and the ultimate signature on the document by the Additional Director General Goods and Service Tax Intelligence are merely topsy-turvy, deplorable administrative exercise of power and a threat to the Constitutional observance of "procedure established by law". It is further submitted that despite delegation of powers of the Commissioner on officers sub-ordinate to him, the structural edifice of the statute presents the Commissioner to be at the helm of affairs. To buttress such contention, the attention of this Court has been drawn to Section 134 of the Act which is couched in a negative language and says that no cognizance of any offence punishable under the Act shall be taken without the previous sanction of the Commissioner.....
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....dering for arrest of persons based on his reasonable belief. Accordingly, the two persons were arrested by the Intelligence Officers through 'Arrest Memo' under the provision of 69 of the Act read with Sections 132(1)(a), 132(1)(b), 132(1)(c) and 132(5) of the Act. Mr. Maity relied on a decision in the case of Tirupati Trading Corporation -Vs- Collector of Customs reported in 1998(104) E.L.T 618 Calcutta wherein the Hon'ble Division Bench held that whether the seizure under Section 110 of the Customs Act, 1962 was under a reasonable belief or not is a justiceable one, but once it is held that there was material, relevant and germen the sufficiency of the material is not open to judicial review. Having regard to rival contentions I am of the considered opinion that 'reasonable belief' or reason to believe as a standard to arrest requires that arresting officer subjectively believe that the suspect has committed the offence and that objectively reasonable person would reach the same conclusion. Reasonable grounds do not require as much evidence as a prima facie case but do require that thing believed to be more likely than not. Therefore, in the light of the aforesaid ....
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.... behalf of the above said companies. But it is ultimately verified and found that the said amount has not been transferred to the credit of the Central Government. Such type of fraudulent activities has been practiced by the said petitioners and therefore, they are not entitled to get any order of bail. To fortify his stand Mr. Maity relied on decision in case of Amal Mubarak Salim Al Reiyami -Vs- Union of India reported in 2015 (321) E.L.T. page 590 Raj wherein it is held that so far as grant of bail to the petitioners on merits is concerned, looking to the gravity of the offence and likelihood of the repetition of the same petitioners are not entitled to bail on merit too. In economic offence as in the present case interest of the National economy is adversely affected and therefore, while considering the question of grant of bail to an accused it should be seen whether it is desirable in National interest or not. In the case of Rajesh Goyal -Vs- Union of India reported in 2012 (284) E.L.T. 164 Raj it has been observed that the accused petitioner has evaded the excise duty causing a great loss to the public exchequer. Hence, the offence being of grave nature, the petitioner sho....