Bombay High Court Grants Bail To Man Accused Of Evading Rs. 144 Crore GST

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Synopsis

The allegations included the man committing tax fraud of Rs. 144.65 crores by availing admissible Input Tax Credit (ITC) of Rs. 20.14 crores and passing on admissible ITC of Rs. 17.73 crores

The Bombay High Court recently granted bail to a man accused of evading GST for Rs. 144 crores, noting that the accused had not committed a heinous crime like murder.

“In the light of the above facts, detention of the applicant in jail is not required. The applicant is not involved in a heinous crime like murder or terrorism. The basic rule is, ‘bail is rule and jail is exception’. The allegations of serious financial impropriety are levelled against the applicant,” the order reads.

A single-judge bench of the high court at Nagpur presided over by Justice Urmila Joshi Phalke, heard a bail application filed by a man accused of obtaining GST registration using fictitious documents and never engaging in any business activity from the registered premises.

The allegations included the man committing tax fraud of Rs. 144.65 crores by availing admissible Input Tax Credit (ITC) of Rs. 20.14 crores and passing on admissible ITC of Rs. 17.73 crores.

The counsel for the applicant argued that the officials did not follow the provisions of Section 41A of the Code of Criminal Procedure (CrPC).

He further contended that the guidelines provided by the Supreme Court in Arnesh Kumar were applicable since the imprisonment for the offence was up to 5 years only.

The Additional Solicitor General opposed the bail application, arguing that the Code of Criminal Procedure (CrPC) did not apply to GST officers.

It was further contended that if there is a separate provision in a special statute regarding any subject, it will prevail over the general provisions of the Code of Criminal Procedure.

The high court stated that there is no reason why Arnesh Kumar's case guidelines should not be made applicable to a statute, as in the applicant's case.

“The guidelines issued by the Honourable Apex Court thus are to be followed in the backdrop of severe congestion in the jail and denial of the bail is an exception, where the custody for the purpose of investigation is not warranted. There is no reason why the aforesaid guidelines shall not be made applicable to the statute like in the present matter, where the power is conferred upon an officer to effect an arrest in case of offences where the penalty prescribed is less than 7 years imprisonment,” the order reads.

Therefore, the high court proceeded to grant bail to the applicant.

Case title: Rahul Kamalkumar Jain vs Director General of Goods and Service Tax Intelligence