Vimalbhai Jayantibhai Bhut vs. State Of Gujarat

Held

The Court held that the petitioner was entitled to regular bail. While acknowledging the gravity of the allegations and the scale of transactions presented by the State, the Court considered that the provisions of the GST Act were sufficient to initiate proceedings for assessment and recovery of revenue. The Court also took into account the law laid down by the Hon'ble Apex Court in Sanjay Chandra v. Central Bureau of Investigation. Without delving into a detailed discussion of the evidence, the Court was of the prima facie opinion that it was a fit case to exercise its discretion and enlarge the applicant on bail. The petitioner 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 his 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 his address. The Court also directed that the trial court should not be influenced by these preliminary observations.

Facts

The petitioner, Vimalbhai Jayantibhai Bhut, filed an application under Section 439 of the Code of Criminal Procedure, 1973, seeking regular bail. The application stemmed 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 (stated as over Rs. 5 crores) was baseless, and that the GST Act provided sufficient mechanisms for revenue recovery without continued detention. The State opposed bail, citing the widespread nature of the offence, transactions worth over Rs. 400 crores involving more than 98 companies, and the filing of a complaint under the GST Act.

Key Issues

1. Whether the petitioner is entitled to regular bail under Section 439 of the Code of Criminal Procedure, 1973, considering the allegations of GST evasion under Section 132(1)(i) of the Goods and Sales Tax Act, 2017? The petitioner argued that the offence was based on presumptions and surmises, that the alleged evasion amount was without basis, and that the GST Act provided sufficient remedies for revenue recovery, making continued detention unnecessary. The petitioner also highlighted that no further investigation was pending against him and that the maximum sentence was five years. The respondent-State opposed bail, emphasizing the gravity and widespread nature of the offence, involving transactions worth over Rs. 400 crores across more than 98 companies, and the prima facie evidence found against the petitioner, leading to the filing of a complaint.