The Bombay High Court granted interim bail to Mahesh Devchand Gala, who was arrested by the Central Goods and Services Tax ( CGST ) and Central Excise, Mumbai. The court emphasised that arrests cannot be made in a routine manner based on mere allegations of an offence, underscoring the importance of protecting the liberty and reputation of individuals.
Mahesh Devchand Gala, a resident of Mumbai and presently in judicial custody, was arrested in connection with a 2021 GST investigation involving Om Sai Nityanand Management Pvt. Ltd. The company had paid Rs. 23.61 lakh in taxes and had Rs. 2.93 crore secured by blocking the Input Tax Credit ( ITC ). Despite these payments, Gala was detained overnight and arrested by the CGST on 14th March 2024, leading to his production before the Metropolitan Magistrate the next day.
The petitioner’s counsel, Mr. Aabad Ponda, argued that the investigation by CGST was based on an old case from 2021, where the company in question had cooperated and paid taxes. He highlighted contradictions in the authorities’ responses and emphasised that there was no reason for overnight detention.
It is further submitted that there was no reason for the petitioner to be detained overnight, and if the respondent did not have the documents, the petitioner could have well been called on some other day or even on the next day instead of being kept overnight.
Devang Vyas, representing respondents, opposed the petition and submitted that the arrest was legal and that there is no merit in the petitioner’s submission that he was illegally detained by the respondent. He also submitted that even the delay has been well explained in the affidavit filed by the respondent.
The court agreed with the petitioner’s submissions, noting discrepancies in the timeline presented by the authorities and expressing concern over arbitrary arrests. Referring to a Supreme Court judgement, the court stressed that deprivation of liberty, even for a single day, is significant.
Justice Revati Mohite Dere observed that “prima facie, we do not find, in the facts, that there was any reason for the respondent No. 2 to keep the petitioner overnight, when he came on 13th March 2023, more particularly, if the respondent No. 2 did not have documents to question the petitioner. It is not as if the petitioner had not cooperated with the authorities, and as such, it was well within the powers of the respondent No. 2 to call him on some other day or even on the next day. We deprecate the practice of keeping a person overnight under the guise of recording his statement, irrespective of whether the person volunteered or not.”
Based on these observations, the Bombay High Court granted interim bail to the petitioner on cash bail and PR bond, with the matter scheduled for further hearing on June 24, 2024.
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