1987 (1) TMI 14 - HC - Income Tax

Summary

Issues Involved: Cancellation of bail, seriousness of economic offences, application of section 439 of the Code of Criminal Procedure, and the principles for granting bail in cases of high-value tax evasion.

Detailed Analysis:

1. Cancellation of Bail:
The primary issue involves the cancellation of bail granted to the accused by the Sessions Judge. The Income-tax Officer filed applications under section 482 of the Code of Criminal Procedure to cancel the bail granted to the accused, arguing that the Sessions Judge should not have granted bail in cases involving serious economic offences.

2. Seriousness of Economic Offences:
The accused were charged under section 276C of the Income-tax Act, 1961, for evasion of income-tax and forgery. The court noted that the alleged tax evasion involved substantial amounts, with one accused evading Rs. 17 lakhs and the other Rs. 14 lakhs. The court emphasized that economic offences of such high valuation jeopardize the entire economy and should be treated seriously.

3. Application of Section 439 of the Code of Criminal Procedure:
The court observed that the Sessions Judge's decision to grant bail was based on the issuance of bailable warrants, which should not be the sole premise for granting bail in non-bailable offences. The court cited the Supreme Court's view that even in bailable offences, bail can be canceled if the ends of justice are jeopardized by the accused's conduct.

4. Principles for Granting Bail in High-Value Tax Evasion Cases:
The court highlighted that the Sessions Judge's order was cryptic and lacked a comprehensive consideration of the seriousness and gravity of the crime. The court noted that the trend in recent decisions is to deal with economic offences seriously and that bail should not be granted as a matter of course in such cases. The court also mentioned that the Income-tax Department failed to show any new facts warranting the cancellation of bail and that the accused had not misused their bail.

Separate Judgments:
The court referred to various judgments, including those of the Supreme Court, which provide guidance on the principles for canceling bail. The court noted that the power to cancel bail should be exercised with care and circumspection and that the accused's conduct after being granted bail is a crucial factor.

Conclusion:
The court concluded that while the Sessions Judge's approach was erroneous, it would be inexpedient to cancel the bail at this stage due to the intervening circumstances, including the prolonged delay in final assessments and the absence of any misuse of bail by the accused. The applications under section 482 were rejected, with the court emphasizing that in serious economic offences, the principle should be "jail and not bail."