TMI Blog2021 (8) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that the arresting authority falls under the term proper officer . When a person is arrested pursuant to the order passed by the Commissioner who has reason to believe that such person has committed any offence specified in the clauses (a), (b), (c) or (d) of sub-section(1) of section 132 of the AGST Act which is punishable under the clause(i) of that sub-section, then such offence being cognizable and non bailable as per sub-section (5) of Section 132 of the AGST Act, the officer authorized to arrest such person is duty bound to inform such person about the grounds of arrest and produce him before the Magistrate within twenty-four hours. Therefore, the reference to section 132(5) in sub-section (2) of section 69 of the ACGST Act is made so as to differentiate between the person for whom the Commissioner has reason to believe that such person has committed cognizable and non bailable offences or non-cognizable and bailable offences as provided in section 132 of the AGST Act. It appears that with a view to give effect to the power to grant bail by the authorized officer under the clause (a) of the sub-section (3) of the section 69, subclause(b) of sub-section(3)of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12- 07-2021 in connection with the aforesaid case and has been in detention since then. 6. The genesis of the abovementioned criminal prosecution may be traced to when the Petitioner was served with a notice U/s 50 of Cr.P.C. by the Superintendent of State Tax Assam, BIEO, Assam, Srimantapur, Guwahati-32 (hereinafter referred to as the Respondent No. 2), in reference to B.I. (E.O.) Assam Tax P.E. No. 03(03)/2021 under the provision of Section 132(1) (i) of the Assam GST Act, 2017 (in short the AGST Act ) alleging that sufficient materials have been found against the Petitioner regarding his involvement in evasion of taxes and Cess, amounting to more than ₹ 5, 00, 00,000/- (Five Crores) which is a cognizable offence U/S 132(1) (i) AGST Act. It was further alleged that the Petitioner is found to have deliberately supplied goods without issuing invoices in violation of the provisions of AGST Act with intention to evade Tax during the period of 2019 to 2021. Pursuant to issue of the said notice U/s 50 Cr.P.C. the Petitioner was arrested on 12.07.2021 and was forwarded to the learned Chief Judicial Magistrate, Kamrup Metro, Assam vide the Forwarding Report, dated 12.07.2021, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prisons can be decongested. The Hon ble Apex Court in Arnesh Kumar (supra) inter alia embargoed the police officers from arresting an accused unnecessarily without complying with the provisions embodied in Section 41 and Section 41(A) of the Cr.P.C. in cases where the offence is punishable with imprisonment for a term which may be less than 7 years or which may extend up to 7 years. The Hon ble Apex Court also directed the learned Magistrates not to authorize detention casually and mechanically without recording his satisfaction on the forwarding report furnished by the police officer. In the order dated 07-05-2021, the Hon ble Apex Court further directed the High Powered Committees constituted by the State Governments/Union Territories to consider releasing prisoners by adopting the guidelines followed by them last year, at the earliest. 10. Dr. Saraf, the learned counsel for the Petitioner, has also submitted that the Petitioner is running his business from his permanent place of business situated at Ram Bhawan, Room No. 311, 3rd Floor, T.R. Phookan Road, Fancy Bazar, Guwahati-781001. He also has submitted that the Petitioner is a registered dealer under VAT, CST and GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not appearing in spite of repeated summons and is involved in huge amount of evasion of tax, ii. a person is a habitual offender and he has been prosecuted or convicted on earlier occasion, iv. a person is likely to flee from country, v. a person is originator of fake invoices i.e., invoices without payment of tax, vi. when direct documentary or otherwise concrete evidence is available on file/record of active involvement of a person in tax evasion. 12. The learned senior counsel for the Petitioner has also submitted that the allegations as leveled against the Petitioner are absolutely vicious and his arrest by the Respondent No. 2 is totally unlawful for which the petitioner be enlarged on bail. The Petitioner has been arrested under Section 69 of the AGST Act for the offence punishable under Section 132(1) (a) of the said Act. 13. The learned senior counsel for the Petitioner further submitted that on a perusal of sections 69 and 132 of the AGST Act it transpires that the Commissioner of State Tax to arrest such person must have reason to believe that the person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive before authorizing the Respondent No. 2 to arrest the Petitioner and simply recorded that he has reason to believe that the Petitioner has committed an offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of Section 132 of the said Act. The learned Senior Counsel further submitted and placed reliance on the case of Joti Prashad v. State of Haryana 1993 Supp (2) SCC 497 that while interpreting penal law, protection of liberty has to be accepted as the provision of the statute provided that the authority must have reasonable belief and the expression reason to believe has to be accepted jurisprudentially. The relevant observation of the Hon ble Apex Court made in the said case and emphasized by the learned senior counsel of the Petitioner are reproduced herein below: 4. Under the Indian Penal law, guilt in respect of almost all the offences is fastened either on the ground of intention or knowledge or reason to believe . We are now concerned with the expressions knowledge , and reason to believe . Knowledge is an awarenes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The learned Senior Counsel for the Petitioner further omnipotently denies the allegation as leveled against the Petitioner by the Respondent Authorities pertaining to the evasion of Tax, Cess, Penalty and Interest and in furtherance of such denial, he has argued that the Respondent No. 2, only to make the offence non-bailable, arbitrarily and without following the due process of law, has shown ₹ 10, 22, 31, 514.18/- i.e. above 5 Crores as tax and cess evaded. Unless and until, the liability to pay tax, cess, penalty and interest has been determined by undertaking assessment proceeding by the Assessing authority, question of arrest does not arise. In the present case, the Respondent No. 2 who is not an assessing authority to assess the liability of tax, cess, penalty and interest acted without authority of law and without jurisdiction in showing imaginary figure of tax, cess, penalty and interest evaded more than 5 Crores and arresting the Petitioner and as such the Petitioner is liable to be released on bail. 19. The learned senior counsel for the Petitioner has drawn immediate attention of this Court that from a conjoint reading of section 132 (1) (i) and section 132 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zures have been signed by the accused i.e., the Petitioner and his representative(s) respectively. It is further stated that it could be ascertained that the tax payer deliberately supplied goods without issuance of invoices in violation of the provisions of Assam GST Act, 2017 with the intention to evade tax. From the verification and examination of the documents it transpires that the total evasion detected inclusive of applicable tax, cess, penalty and interest is ₹ 22, 767, 13, 211.04/- and this includes the tax and cess evaded which comes to ₹ 10, 22, 31, 518.18/-. The learned Public Prosecutor, Mr. Phukan has also submitted that the taxpayer/accused Subhash Kumar Singh is liable under Section 132(1) (i) of the Assam GST Act, 2017. 24. The learned Public Prosecutor has further submitted that during the course of enquiry, the tax payer was issued with a notice on 9th April 2021 for production of books of account/records in connection with the seized documents under Section 35 (1) of Assam GST Act, 2017. 25. Mr. Phukan, has further submitted that the accused, during the course of enquiry, was examined several times and he presented himself before the enquiry, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut any godown. Moreover, evidence has been collected from records in sized exhibits that conducted business from some godown in Lakhra, Guwahati. iv. That the accused taxpayer deliberately and intentionally concealed his actual turnover and liability to pay consequent GST is evident from examination of the seized documents which clearly establishes his concealed business activities/supplies. The details of such concealed/secreted business transactions were accepted by the accused taxpayer during examination and he has put his signature as a token of that acceptance. v. The accused taxpayer did not create any e-way bill to escape his liability. vi. That that taxpayer did not display his GSTIN at his declared principal place of business. 26. Countering the submission of the learned senior counsel for the Petitioner, the learned Public Prosecutor, with regard to the judgment of the Hon ble Apex Court in Re: Contagion of Covid 19 Virus reported in 2021 SCC Online 376, has submitted that the aforesaid judgment pertaining to the release of a person on parole and the direction given to a police officer not to arrest a person in contravention of the guidelines laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as the judgment of the Hon ble High Court Punjab Haryana is concerned, has submitted that the facts of this case are not same with the facts of the aforesaid decision, and accordingly, the same does not appear to be applicable in the given facts of this case. 29. Mr. Phukan, learned Public Prosecutor, Assam, further urged that before the arrest of the accused petitioner, the Superintendent of State Tax, BIEO wrote to the Principal Commissioner of State Tax for issuing warrant of arrest against the accused petitioner under Section 69 of the Assam GST Act, 2017, which was accordingly issued. 30. Mr. Phukan, learned Public Prosecutor, has lastly submitted that the entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. Mr. Phukan has further submitted that a murder may be committed in the heat of the moment upon passions being aroused, whereas, an economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the AGST Act which provides that the offences specified in the clauses (a), (b), (c) and (d) of the sub-section(1)of the section 132 and punishable under the clause (i) of the sub-section(1)of the section 132, shall be cognizable and non-bailable, then the officer authorized to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty-four hours. In other words, when a person is arrested pursuant to the order passed by the Commissioner who has reason to believe that such person has committed any offence specified in the clauses (a), (b), (c) or (d) of sub-section(1) of section 132 of the AGST Act which is punishable under the clause(i) of that sub-section, then such offence being cognizable and non bailable as per sub-section (5) of Section 132 of the AGST Act, the officer authorized to arrest such person is duty bound to inform such person about the grounds of arrest and produce him before the Magistrate within twenty-four hours. Therefore, the reference to section 132(5) in sub-section (2) of section 69 of the ACGST Act is made so as to differentiate between the person for whom the Commissioner has reason to believe th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AGST Act, which is punishable under the clause(i) or clause (ii) of the sub-section (1) or the sub-section (2) of the section 132 of the AGST Act, then he may pass an order authorizing an officer of the department to arrest such person. Thereafter, if the offence falls under the category of cognizable and non bailable offence as per the sub-section (5) of the section 132, then sub-section (2) of section 69 casts duty upon the officer authorized to arrest such person and to inform such person of the grounds of arrest and produce him before the Magistrate within twenty-four hours; whereas if the offence is non-cognizable and bailable as per the sub-section(4) of the section 132 then subject to the relevant provisions of the Code, the clauses (a) and (b) of the subsection (3) of section 69 provides for enlarging such person on bail by the concerned officer i.e. Deputy Commissioner or Assistant Commissioner exercising the same powers and be subjected to the same provisions as an officer-in-charge of a police station as held in Vimal Yashwantgiri Goswami Vs. State of Gujarat (In R/Special civil Application No. 13679 of 2019 with 3209/2020, 4468/2020, 4456/2020, 13893/2019 and 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner in compliance of the provision of Section 132 (1) (i) of the Assam GST Act, 2017. Hence, the argument put forth by the learned counsel for the Petitioner that the arrest of the Petitioner is illegal and arbitrary is devoid of any merit. This Court has also taken note of the fact, as appears from the materials in the case record, that the Petitioner evaded tax worth more than ₹ 5 crores and the investigating agency has collected materials to show that the Petitioner is the originator of the fake invoices, etc and direct documentary evidence is there in the record about the active involvement of the Petitioner in tax evasion. The investigation of the case is still continuing in order to ascertain the location of the godown and to examine other related witnesses and also for calculation of interest in view of the revised notification (the notification is specifically referred to in para 34) regarding rate of interest which keeps varying from time to time. Moreover, if the Petitioner is enlarged on bail at this stage, he is more than likely to hamper the investigation and/or tamper evidence which may likely to compromise with the entire investigation. 36. Before part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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