Anilbhai Jayantibhai Bhut vs. State Of Gujarat

Held

The Court held that the petitioner is entitled to regular bail. The Court considered that the petitioner is engaged in the manufacturing/trading of edible oil. It was also noted that the provisions of the GST Act are sufficient for the revenue to initiate proceedings for assessment and recovery of any loss. The Court took into consideration the law laid down by the Hon'ble Apex Court in the case of Sanjay Chandra v. Central Bureau of Investigation. The Court found it to be a fit case to exercise discretion and enlarge the applicant on regular bail, without discussing the evidence in detail, given the nature of the allegations. The applicant was ordered to be released on bail upon furnishing a personal bond of Rs. 10,000/- with one surety of like amount, subject to several conditions, including not misusing liberty, not acting injuriously to the prosecution, surrendering passport, not leaving India without permission, staying out of Gujarat for six months while remaining available to the investigating agency, marking presence at the police station, and furnishing present address. The trial court was cautioned not to be influenced by the preliminary observations made by this Court. Rule was made absolute to the extent of granting bail.

Facts

The petitioner, Anilbhai Jayantibhai Bhut, filed an application under Section 439 of the Code of Criminal Procedure, 1973, for regular bail. The application arose from an order dated 22.10.2018 passed by the Assistant Commissioner of State Tax, initiating proceedings for an alleged offence under Section 132(1)(i) of the Goods and Sales Tax Act, 2017. The petitioner was apprehended for alleged evasion of GST, causing loss to the State Exchequer. The petitioner contended that the allegations were based on presumptions and surmises, that the quantum of evasion (over Rs. 5 crores) was baseless, and that he had not taken tax credit on the basis of disputed invoices. He also argued that the GST Act provided sufficient mechanisms for revenue recovery and that his continued detention was unnecessary as no further investigation was pending against him. The maximum sentence for the offence is five years.

Key Issues

1. Whether the petitioner is entitled to regular bail in connection with the alleged offence under Section 132(1)(i) of the Goods and Sales Tax Act, 2017, considering the nature and gravity of the allegations and the stage of investigation? Petitioner's Arguments: The petitioner argued that the entire case was based on presumptions and surmises, with no clear indication of his capacity in business or the specific actions leading to evasion. He asserted that the stated evasion amount of over Rs. 5 crores was without basis and that he had not availed tax credit on disputed invoices. He further contended that the GST Act provided adequate provisions for revenue recovery, making continued detention unnecessary, especially since no further investigation was pending against him. The maximum sentence for the offence is five years, and his continued custody would serve no useful purpose. Respondent's (State of Gujarat) Arguments: The respondent opposed the grant of bail, citing the nature and gravity of the offence. They submitted that the offence was widespread, involving transactions worth over Rs. 400 crores, and that the investigation was complex, encompassing more than 98 companies/firms. The respondent stated that prima facie evidence had been found against the petitioner, leading to the filing of a complaint under the GST Act.