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2025 (5) TMI 848 - HC - GSTRecall of bail granted - Respondent along with three other persons had been arrested by the petitioner Department for fraudulent claim of IGST refund of more than 63 crores - HELD THAT - Essentially the learned MM after considering the totality of facts has granted bail to the Respondent. There is no ground shown that the discretion has not been exercised judiciously. The learned ASJ before whom the previous involvement had been agitated has duly considered the same. Some of the prosecutions claimed by the Department are under 174 175 IPC for not appearing before pursuant to the service of summons. Furthermore no Complaint has been filed till date and there is no ground made out for recall of the Bail order. Petition dismissed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court were:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of Bail Granted and Grounds for Recall under Section 439(2) CrPC The legal framework governing bail and its recall under Section 439(2) CrPC requires that the Court exercise its discretion judiciously, considering the facts and circumstances of the case, including the nature of the offense, the antecedents of the accused, and the possibility of tampering with evidence or fleeing justice. The Court noted that the learned CMM had granted bail after considering the totality of facts, and no ground was shown that the discretion was exercised arbitrarily or without proper application of mind. The subsequent application for recall of bail was premised on alleged fraud and misrepresentation by the respondent regarding his prior involvement in economic offenses. The Court observed that the application for recall was dismissed by the learned Additional Sessions Judge (ASJ) on the ground that the prior cases cited by the Department were merely inquiries and not formal complaints or prosecutions. The ASJ further noted that some inquiries dated back to 1993 and 1996, and no complaints had been filed in these matters. The Court emphasized that the learned ASJ's dismissal was based on the petitioner's own admission that no complaints had been filed in these cases, and thus they could not be treated as previous criminal involvement. This reasoning was crucial in upholding the bail order and rejecting the recall application. Issue 2: Consideration of Previous Involvement in Multiple Economic Offenses The Department contended that the respondent was involved in numerous cases of fraud and economic offenses, including investigations by the Directorate of Revenue Intelligence (DRI), Customs, and CBI, and that this fact should have been considered by the trial court while granting bail. The Court reviewed the detailed list of ten prior inquiries and investigations involving the respondent, spanning from 1993 to 2019, across various departments and cases involving fraudulent claims, illegal telephone exchanges, and duty drawbacks. However, the Court noted that many of these cases were still at the inquiry stage, with no formal complaints filed. The Court relied on the principle that mere inquiries or investigations without formal charges or complaints do not constitute previous convictions or criminal antecedents that would automatically disqualify a person from bail. The Court further noted that some cases involved minor procedural offenses under Sections 174 and 175 IPC, relating to non-appearance after summons, and in some instances, the respondent had complied with investigations after protection was granted. Therefore, the Court concluded that the previous involvement, as claimed by the Department, did not amount to sufficient ground to cancel the bail, especially in the absence of formal complaints or convictions in most cases. Issue 3: Alleged Fraud or Misrepresentation by the Respondent to Obtain Bail The Department alleged that the respondent succeeded in obtaining bail by making untrue statements and thereby playing fraud upon the Court, misleading it about his involvement in multiple conspiracies of tax evasion. The Court examined this contention in light of the submissions and the record. It was noted that the counsel for the petitioner had conceded before the learned ASJ that no complaints had been filed in the prior cases, undermining the claim of fraud or misrepresentation. Moreover, the Court found no evidence that the respondent had concealed material facts or misled the Court in the bail proceedings. The absence of formal complaints in the prior inquiries was a critical factor in rejecting the fraud allegation. Thus, the Court held that no fraud or misstatement of facts had been established that would justify recalling the bail order. Issue 4: Treatment of Pending Inquiries and Non-Filing of Complaints The Court addressed the legal significance of pending inquiries and the non-filing of complaints in relation to the respondent's previous involvement. It was held that inquiries and investigations, without formal complaints or charges, do not constitute criminal antecedents for the purpose of bail considerations. The Court underscored that the mere pendency of inquiries cannot be equated with criminal convictions or even formal charges. This principle was pivotal in the Court's reasoning, as many of the cases cited by the Department were still at the inquiry stage, some dating back decades, with no complaints filed to date. Issue 5: Reliance on Precedents Regarding Cancellation of Bail The Department relied on several precedents to argue for cancellation of bail, including judgments that emphasize the seriousness of economic offenses and the need to prevent accused persons from misusing the bail process. The Court considered these precedents but distinguished the present case on facts, noting that the learned CMM and ASJ had exercised their discretion judiciously and that the factual matrix, including the absence of formal complaints and the nature of prior involvement, did not warrant cancellation. The Court also observed that the learned ASJ had duly considered the previous involvement and found the Department's claims insufficient to disturb the bail order. 3. SIGNIFICANT HOLDINGS "There is no ground shown that the discretion has not been exercised judiciously." "Some of the prosecutions claimed by the Department are under 174, 175 IPC for not appearing before pursuant to the service of summons. Furthermore, no Complaint has been filed till date and there is no ground made out for recall of the Bail order." "Mere inquiries or investigations without formal complaints or prosecutions cannot be considered as previous involvement of the respondent for the purpose of bail." "No fraud or misstatement of facts which warrants recall of bail Order has been established." The Court affirmed the principle that bail is a rule and jail is an exception, and that the mere pendency of inquiries or investigations does not justify interference with bail unless there is clear evidence of abuse of process or risk of tampering with evidence or fleeing justice. Accordingly, the Court dismissed the petition seeking recall of bail, upholding the orders of the learned CMM and ASJ.
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