Bombay HC Granted Bail to Individual Accused of 144 Cr GST Evasion
In a recent development, the Bombay High Court has granted a bail on 25 January 2024 to an individual accused of evading Rs. 144 crores in Goods and Services Tax (GST). The court’s decision emphasized that the accused did not commit a heinous crime like murder, making detention unnecessary.
Justice Urmila Joshi Phalke, presiding over a single-judge bench in Nagpur, heard the bail application filed by the accused. The allegations against the individual involved obtaining GST registration through fictitious documents and not engaging in any business activity from the registered premises.
The accused was accused of committing tax fraud amounting to Rs. 144.65 crores, involving availing Input Tax Credit (ITC) of Rs. 20.14 crores and passing on ITC of Rs. 17.73 crores.
The applicant’s counsel argued that officials failed to follow the provisions of Section 41A of the Code of Criminal Procedure (CrPC). Additionally, they contended that the Supreme Court’s guidelines in Arnesh Kumar’s case applied, given that the imprisonment for the offense was up to 5 years only.
However, the Additional Solicitor General opposed the bail application, asserting that the CrPC did not apply to GST officers. It was further argued that specific provisions in the special statute regarding the subject would prevail over the general provisions of the CrPC.
The high court, in its ruling, stated that Arnesh Kumar’s case guidelines should be applicable to the statute in question. The court emphasized that denial of bail should be an exception, especially in cases where custody for investigation purposes is not warranted.
The order highlighted the severe congestion in jails and stressed that the guidelines issued by the Supreme Court should be followed. The court concluded that there was no reason why the guidelines should not be applicable, especially when the power to effect an arrest is conferred upon an officer for offenses with penalties less than 7 years imprisonment.
As a result, the high court granted bail to the applicant in the case titled “Rahul Kamal Kumar Jain vs Director General of Goods and Service Tax Intelligence (Case No.DGGI/INTL/1082/2023).
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