2025 (6) TMI 1248 - HC - GST

Seeking grant of bail - petitioner is ready to co-operate with the investigation during trial - bulky documents - HELD THAT - Taking into consideration the overall facts and circumstances of the case judgment of Hon ble Supreme Court in the case of Vineet Jain 2025 (5) TMI 925 - SC ORDER and the arguments advanced by counsel for both the parties without expressing any opinion on the merits and demerits of the case this Court deems it just and proper to enlarge the petitioner on bail. The accused-petitioner-Mahesh Sharma S/o Shri Harishankar Sharma shall be released on bail on furnishing personal bond of Rs. 5, 00, 000/- along with two sureties of the like amount to the satisfaction of the trial Court - bail application allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the petitioner is entitled to bail under Section 483 of the B.N.S.S. given the charges under Sections 132(1)(c), (f), (h), and (i) of the Central Goods and Services Tax Act, 2017;
• The applicability and scope of bail in economic offences punishable with a maximum sentence of five years;
• The relevance of the petitioner's conduct during investigation, including previous non-appearance on summons, in determining the likelihood of absconding;
• The weight to be accorded to the nature of evidence (documentary) and criminal antecedents in bail considerations;
• The conditions that should be imposed on bail to ensure the petitioner's presence and cooperation during trial;
• The extent to which precedents, particularly the Supreme Court's decision in Vineet Jain v. Union of India, influence the grant of bail in such cases.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Bail under Section 483 of B.N.S.S. for offences under CGST Act

Relevant legal framework and precedents: The petitioner sought bail under Section 483 of the B.N.S.S., which governs bail procedures. The offences under Sections 132(1)(c), (f), (h), and (i) of the Central Goods and Services Tax Act, 2017, carry a maximum punishment of five years. The Supreme Court judgment in Vineet Jain v. Union of India was heavily relied upon, where the Court emphasized that ordinarily, in cases where the maximum sentence is limited to five years and the prosecution is based on documentary evidence, bail should not be denied unless extraordinary circumstances exist.

Court's interpretation and reasoning: The Court noted that the petitioner has been in custody since the FIR date and a charge-sheet has already been filed. The Court observed that the maximum sentence is limited and that the prosecution's case is documentary in nature, which typically reduces the risk of tampering with evidence or influencing witnesses. The Court recognized the precedent that bail should be granted in such cases unless exceptional reasons justify denial.

Key evidence and findings: The charge-sheet was filed, and the petitioner had no criminal antecedents. The prosecution's evidence was primarily documentary. The petitioner had been in custody since the FIR date.

Application of law to facts: Applying the principles from Vineet Jain, the Court found no extraordinary circumstances to deny bail. The petitioner's case fell within the category where bail is generally granted before trial.

Treatment of competing arguments: The prosecution argued that the petitioner's earlier failure to appear on summons indicated a risk of absconding, and that economic offences should be treated as a special category warranting stricter bail scrutiny. The Court acknowledged these contentions but found them insufficient to override the general principle favoring bail in such cases, especially given the petitioner's cooperation and absence of antecedents.

Conclusions: The Court concluded that the petitioner should be enlarged on bail, aligning with the Supreme Court's guidance and the facts of the case.

Issue 2: Impact of Petitioner's Conduct During Investigation on Bail

Relevant legal framework and precedents: The conduct of the accused during investigation, including compliance with summons, is a relevant factor in bail considerations. However, it must be balanced against other factors such as the nature of the offence, evidence, and antecedents.

Court's interpretation and reasoning: The prosecution highlighted that the petitioner did not appear on summons earlier, suggesting a risk of absconding. The Court considered this but weighed it against the absence of criminal antecedents and the petitioner's readiness to cooperate during the trial.

Key evidence and findings: The petitioner's non-appearance on summons was noted, but no further evidence of attempts to evade investigation or trial was presented.

Application of law to facts: The Court balanced the risk of absconding against the petitioner's overall profile and the nature of the offence. The limited sentence and documentary evidence reduced the risk that the petitioner would interfere with the trial process.

Treatment of competing arguments: While the prosecution urged caution due to the petitioner's conduct, the Court found that adequate bail conditions could mitigate the risk of absconding.

Conclusions: The petitioner's prior non-compliance with summons did not justify denial of bail when adequate safeguards were imposed.

Issue 3: Conditions to be Imposed on Bail

Relevant legal framework and precedents: Courts have the authority to impose conditions on bail to ensure the accused's presence at trial, prevent tampering with evidence, and protect the integrity of the investigation and trial.

Court's interpretation and reasoning: The Court imposed several conditions including prohibition on tampering with evidence or influencing witnesses, restriction on leaving the country without prior permission, mandatory deposit of the passport, and requirement to cooperate and attend trial hearings.

Key evidence and findings: The Court relied on the nature of the offence and the risk factors highlighted by the prosecution to tailor conditions that would safeguard the trial process.

Application of law to facts: The conditions were designed to address the prosecution's concerns about absconding and interference, while respecting the petitioner's right to bail.

Treatment of competing arguments: The Court balanced the prosecution's concerns with the petitioner's rights, ensuring that bail was granted subject to strict conditions.

Conclusions: The bail was granted on furnishing a personal bond and sureties, along with the enumerated conditions to ensure compliance and cooperation.

3. SIGNIFICANT HOLDINGS

"The offences alleged against the appellant are under Clauses (c), (f) and (h) of Section 132(1) of the Central Goods and Services Tax Act, 2017. The maximum sentence is of 5 years with fine. A charge-sheet has been filed. The appellant is in custody for a Court of a Judicial Magistrate. The sentence is limited and in any case, the prosecution is based on documentary evidence. There are no antecedents. We are surprised to note that in a case like this, the appellant has been denied the benefit of bail at all levels, including the High Court and ultimately, he was forced to approach this Court. These are the cases where in normal course, before the Trial Courts, the accused should get bail unless there are some extraordinary circumstances."

This Court, following the Supreme Court's reasoning, established that in cases involving economic offences punishable with a maximum of five years, where the prosecution's evidence is documentary and the accused has no criminal antecedents, bail should ordinarily be granted unless extraordinary circumstances exist.