GST Evasion: Gujarat HC grants bail to Kingpin of racket involving 13 fictitious firms leading to evasion worth Rs.6.31 cr [Read Order]

GST Evasion: Gujarat HC grants bail to Kingpin of racket involving 13 fictitious firms leading to evasion worth Rs.6.31 cr [Read Order]

GST Evasion - Gujarat HC - Kingpin of racket - Taxscan

The Gujarat High Court granted bail to the Kingpin of a racket involving 13 fictitious firms leading to evasion worth Rs.6.31 cores.

Mr. Tejas M.Barot, the Counsel appearing for the applicant, Sanjay Prahladbhai Patel submitted that the applicant came to be implicated solely on the basis of the statement of co-accused, which is not evidence in the eyes of law. It is submitted that the investigating agency not being a police officer and not falling within the ambit of sections 25 and 26 of the Indian Evidence Act have abused the power and authority to obtain an inculpatory statement of the applicant under duress and coercion. It is submitted that the applicant is arrested in connection with the alleged demand by the GST authorities without determining the extent of liability of the said alleged demand.

It is submitted that the arrest of the applicant in the alleged offense is effected only on the ipse dixit of the Tax Department and in the colorable exercise of powers under section 69 of the Act. It is submitted that the very basis for arriving at a quantified sum of Rs.6.31 crores of the alleged tax evasion is obscure and no detail whatsoever has been provided in support thereof, which clearly shows that the same is a result of a figment of the imagination of the tax authorities.

It is submitted that in an absolutely unprecedented manner, the department has clubbed demands and liabilities in respect of 13 different entities, for making out a case of evasion against the applicant, which is absolutely foreign to tax law. It is also submitted that though the demands in respect of 13 different entities were clubbed to arrive at the alleged amount of tax evasion of Rs.6.31 crores against the accused, nevertheless separate complaints are filed against the accused, wherein some of the accused are even shown as witnesses in the charge­sheet.

The applicant has submitted that the investigation in the case is over and the charge­sheet in the form of complaint has already been filed. It is submitted that a complaint is filed at the conclusion of the investigation. It is submitted that the present case is based on documentary evidence which may at best attract a punishment maximum of up to 5 years. It is submitted that the present offense is triable by the Magistrate and considering the burden of work and pending cases in the trial court the applicant may be released on bail as the applicant is in jail since December 14, 2020. It is also submitted by the learned Advocate on instructions of the applicant, that the applicant is ready and willing to deposit a reasonable amount as suggested by this Court.

The respondent­ State has opposed the grant of regular bail considering the nature and gravity of the offense. It is submitted that the present applicant is one of the kingpin and mastermind of the whole racket involving 13 fictitious firms leading to evasion of tax to the tune of Rs.6.31 cores.

The Single Judge Bench of Justice A.S.Supehia allowed the bail application subject to the deposit of an amount of Rs.2,00,000­ before the State Tax Officer and on depositing the aforesaid amount and producing an appropriate document with regard to the depositing of the amount the applicant is ordered to be released on regular bail.

The court has further directed the applicant to file an undertaking to deposit the remaining amount of Rs.13,00,000/­ within the period of 08 (eight) weeks. It is clarified that if the aforesaid order of the Court is not complied with, the bail granted to the applicant shall automatically stand canceled. It is also clarified that the aforesaid conditions will be without prejudice to the right and contentions of the present applicant before the appropriate authority. Further, the applicant is released on bail on executing a personal bond of Rs.10,000 with one local surety of the like amount to the satisfaction of the learned Trial Court and subject to the various conditions

Firstly, not take undue advantage of liberty or misuse liberty.

Secondly, not act in a manner injurious to the interest of the prosecution.

Thirdly, surrender his passport, if any, to the lower court within a week.

Fourthly, not leave the State of Gujarat without prior permission of the concerned Trial Court.

Fifthly, mark presence before the concerned Police Station on alternate every Monday for initial six months and thereafter, on alternate Monday of every English calendar month, for a period of six months, between 10:00 a.m. and 2:00 p.m.

Lastly, furnish the latest address of residence to the Investigating Officer and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of the Trial Court.

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