Yes, the Honorable Punjab and Haryana High Court in the case of Vishal Chauhan v. Haryana State GST (Intelligence Unit) [CRM-M-37860 of 2024 (O & M) dated August 14, 2024] granted bail to the Petitioner, where the Petitioner was arrested for alleged wrongful availment of Input Tax Credit by showing purchases from non-existent or fraudulent suppliers. The petitioner was granted regular bail as trial was likely to be prolonged; the Show Cause Notice under Section 74(1) was yet to be adjudicated and the exact liability of the Petitioner was yet to be fixed.
The Honorable Punjab and Haryana High Court noted that the Petitioner was in custody since February 20, 2024, and he had no criminal antecedents and had a permanent abode. There was no likelihood of the Petitioner’s fleeing from the country. He was also ready to surrender his passport. Further noted that the sentence to be awarded in this case was directly linked with the quantum of evasion of tax and the prosecution of the Petitioner was also linked with the determination of evasion of tax because if there is no evasion of tax, there cannot be any criminal liability. The determination of tax liability is subject to the challenge before tribunals and courts and does not fall within the realm of criminal courts.
The Honorable Court relied on the Division bench judgment of this Court in the case of Akhil Krishan Maggu & another vs. Deputy Director, Directorate General of GST Intelligence & others : 2020 (77) GST 279 and Jayachandran Alloys (P) Ltd. vs. Superintendent of GST & Central Excise : (2019) 105 Taxmann.com 245 (Madras,) and observed that the provisions of Sections 69 and 132 of HGST Act which empower Proper Officer to arrest a person who has committed any offense involving evasion of tax more than Rs.5 Crores and prescribe maximum sentence of 5 years which fell within the purview of Section 41A of Cr. P.C., the power of arrest should not be exercised at the whims and caprices of any officer or for the sake of recovery or terrorizing any businessman or creating an atmosphere of fear, whereas it should be exercised in exceptional circumstances during the investigation.
The Honorable Court ordered that the Petitioner to be released on regular bail, subject to his executing personal bonds with two solvent sureties each in the sum of Rs. 50 Lakhs to the satisfaction of the Trial Court and further subject to the condition that he will surrender his passport before the trial Court and shall not leave the country during trial without prior permission of the Court.
Author’s Comments
Where self-assessment is challenged, the burden rests on the Revenue making the allegation and not on the Registered Person-suffering the allegation. The Burden of proof is not discharged by making the allegation. The Burden of proof is discharged only when a mountain of evidence commensurate with the nature of the allegation made is produced and appended to notice. Allegations of severe wrong-doing require proportionately substantial evidence. Evidence is not a extract of books of accounts or statements taken on-oath. Evidence is that proves something.
Further, Arrest is not the commencement of a sentence. Pre-trial detention is subject to enlargement (or to be released) on bail. Pre-trial detention is subject to bail as a matter of right under section 167 of the Code of Criminal Procedure (Section 187 of Bharatiya Nagarik Suraksha Sanhita 2023). Statutory bail even in case of the offense charged attracts transportation for life or death is set at ninety (90) days. A Delay in filing a charge-sheet is good ground to enlarge on bail. Pre-trail remand, under the custody of the investigating officer or judicial custody, is only until the preliminary investigation is completed in so far as collection of evidence or securing deposition of material witnesses is secured. While the risk of inducement to witnesses may be good grounds to seek remand but this risk cannot last the entire duration of the trial. As soon as necessary evidence from witnesses is secured, this risk stands de-risked and bail must be granted.
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