2019 (1) TMI 550 - HC - GST

Cancellation of petitioner s bail - the sole ground for cancellation of the petitioner s bail is the impression given to the Sessions Court that the quantum of tax evasion involved is not Rs. 4.58 crores but Rs. 85 crores - Held that - It is evident that the order cancelling the petitioner s bail does not proceed on the basis of the quantum of tax evasion involved but on the basis that the petitioner has attempted to intimidate witnesses whom he had made dummy directors/proprietors in certain companies/firms - this Court is of the opinion that there is no infirmity in order dated 22.12.2018 made by the Sessions Court cancelling the petitioner s bail; and that the petitioner having misused and abused the liberty granted to him is not entitled to the benefit of bail at this stage - application dismissed.

Summary

Issues:
Bail cancellation based on alleged tax evasion and witness intimidation.

Analysis:
The petitioner was initially granted bail after arrest but faced subsequent applications for bail cancellation. The petitioner argued discordance between the grounds for cancellation in the first and second applications, emphasizing that tax evasion is a non-cognizable and bailable offense under specific sections of the Central Goods and Services Tax Act 2017. The core contention was the misrepresentation of the quantum of tax evasion, with the respondent allegedly misleading the court by inflating the amount from Rs. 4.58 crores to Rs. 85 crores. The petitioner also refuted claims of intimidating witnesses, asserting the lack of evidence to support such allegations.

During the proceedings, statements from witnesses were presented, alleging threats by the petitioner for their involvement as dummy directors in companies used for fraudulent tax practices. The petitioner challenged these statements by highlighting inconsistencies in the mentioned firms not aligning with those involved in the alleged tax evasion schemes. The court scrutinized the handwritten figures in the documents, clarifying that whether the amount was Rs. 85 crores or Rs. 8.5 crores was irrelevant due to the severity of the offense under Section 132(1)(i) triggered by amounts exceeding Rs. 5 crores.

Ultimately, the court upheld the order cancelling the petitioner's bail, emphasizing the petitioner's attempts to intimidate witnesses, who were crucial in the fraudulent activities. The court concluded that the petitioner had abused the liberty granted through bail and was not entitled to its continuation at that stage. Both bail applications were dismissed without costs, with a clarification that the judgment did not reflect on the case's merits or preclude the petitioner from seeking bail in the future.