Introduction
In the matter of Rahul Bassi v. Directorate General of GST Intelligence[i], the Punjab and Haryana High Court (‘HC’) granted bail to the Petitioner accused of offence under s. 132(1)(b) & (c) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’). The regular bail was granted considering that the offence carries a maximum punishment of 5 years and pre-trial detention cannot be indefinite considering that the trial will take substantial time to complete. Importantly, the HC noted that the witnesses are official witnesses who cannot be influenced.
Brief Facts
The Petitioner was arrested on 19.04.2023 and a complaint was filed by the Director General of GST Intelligence against the Petitioner for commission of offences under s. 132(1)(b) & (c) read with s. 132(1)(i) of the CGST Act.
The Petitioner filed an application for regular bail under s. 439 of the Code of Criminal Procedure, 1973 (‘CrPC’) on the ground that the arrest was illegal and was done without following the due process of law i.e., the mandatory requirements of s. 69 of the CGST Act were not fulfilled.
It was contended that show cause notices for determination of tax liabilities under s. 73/74 of the CGST Act have been issued and prosecution has been initiated without determination of tax liabilities.
It was also contended by the Petitioner that they have not contravened the provisions of s.132 of the CGST Act as alleged and have not retained any monetary benefit in the form of availing of ITC or refund.
The Respondent agency on the other hand strongly opposed the bail plea on the ground that there is sufficient evidence to show the commission of the alleged offence by the Petitioner.
Held
The HC granted bail to the Petitioner on the basis that the criminal liability of the accused person was not yet determined by the trial court. The HC additionally noted that the seriousness of the charges, while a significant factor will not be the sole consideration for the grant of bail. In this regard, the HC relies on the observations of the Hon’ble Supreme Court (‘SC’) in the case of Sanjay Chandra v. CBI[ii] where it was observed by the SC that bail cannot be denied solely due to the seriousness of the allegations.
The HC noted that the prosecution’s case relied on official witnesses and such official witnesses cannot be influenced.
Furthermore, the HC observed that the Petitioner was in custody for the past eleven months, and the maximum sentence for the alleged offence is only five years. Therefore, the HC held that indefinite pre-trial detention was unwarranted.
Our Analysis
The HC decision reiterates the correct position in law that a person is presumed to be innocent until proven guilty and has been granted bail not on the merits of the case but on well-established jurisprudence on the grant of bail.
While the HC has addressed the argument of illegal arrest of the Petitioner, noting that due process under s. 69 of the CGST Act was not followed, the observation that official witnesses cannot be influenced is crucial and would be applicable for similar tax cases where statements of official witnesses are relied upon by the prosecution.
The reliance on the decision of the SC in Sanjay Chandra is also important as it correctly lays down that bail cannot be denied merely because of the seriousness of the offence. This decision would be useful for similarly placed assesses who are facing incarceration in similar facts and circumstances.
End Notes
[i] [2024] 161 taxmann.com 238 (Punjab & Haryana)
[ii] 2012 (1) SCC 40
Authored by Aishwarya Pawar, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.
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