Radhey Shyam And Another vs. Assistant Commissioner, CGST Division, Hisar

Held

The Court dismissed the petition for regular bail. The Court found that economic offences, like the alleged evasion of approximately Rs. 55 crores in service tax, constitute a class apart and require a different approach to bail, as per the Supreme Court's observations in Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation. The petitioners, as directors, were allegedly the masterminds and beneficiaries of the duty evasion scheme. The Court noted their involvement in 49 other FIRs across the country for alleged fraud, and their failure to furnish requisite records and join adjudication proceedings despite show cause notices, compelling the respondent to file the complaint. The Court distinguished the present case from Satender Kumar Antil's case, noting the petitioners' avoidance of joining investigation proceedings. Given the gravity of the allegations, the involvement in multiple other cases, and the delay in joining proceedings since 2018, the Court concluded that the petitioners do not deserve the benefit of bail. The observations made are not to be construed as an opinion on the merits of the case or to influence the trial.

Facts

The petitioners, Radhey Shyam and another, are seeking regular bail in a criminal complaint filed by the Assistant Commissioner, CGST Division, Hisar. The complaint alleges that M/s Future Maker Life Care Pvt. Ltd., a company where the petitioners are Managing Director and Chairman-cum-Managing Director, engaged in multi-level marketing and failed to discharge its tax liability. An intelligence input indicated the company was not filing GST returns since March 2018. An inquiry led to the recording of petitioner No.1's statement, sealing of the company's premises, and the arrest of both petitioners. Investigations revealed the company received approximately Rs. 29,59,46,96,250/- from January 2015 to September 2018 for various charges, and service tax amounting to Rs. 54,77,88,938/- for the period October 2016 to June 2017 was not paid. Show cause notices were issued, and an adjudicating authority confirmed the demand and imposed penalties. The petitioners surrendered on November 10, 2025, and their bail application was dismissed by the trial court.

Key Issues

1. Whether the petitioners are entitled to regular bail in a complaint case involving alleged evasion of service tax, considering the nature and gravity of the economic offence and their alleged non-cooperation with the investigation? (Mixed question of law and fact, turning on principles of bail in economic offences and the interpretation of Section 89(1)(a) of the Finance Act, 1994, and Section 9 and 9-AA of the Central Excise Act, 1944). Petitioner's arguments: The petitioners contend they have been falsely implicated, voluntarily appeared, and that the offences are bailable except for Section 89(1)(a) of the Finance Act, 1994. They argue custodial interrogation was not required, the case relies on documentary evidence already with the respondent, and their continued incarceration serves no purpose. They cite Satender Kumar Antil vs. Central Bureau of Investigation for the proposition that offences punishable with a maximum of 7 years imprisonment should entitle them to bail upon surrender. Respondent's arguments: The respondent argues that the petitioners, as directors, were responsible for the company's business and tax evasion. They highlight the substantial amount of tax evaded (Rs. 54,77,88,938/-) and the large number of active user IDs generated (32,86,123/-) involving significant funds. They assert the petitioners are likely to tamper with evidence and that the ratio of Satender Kumar Antil's case does not apply due to their non-cooperation and the serious nature of the economic offence involving public revenue.