Smt. Jecintha Pillai vs. The State Of Telangana

Held

The Court dismissed the Criminal Petition, denying anticipatory bail to the petitioners. The Court considered the observations made by a Division Bench of the same High Court in W.P.No.4764 of 2019 and Batch, dated 18.04.2019. Specifically, the Division Bench had held that prosecution under Section 132 of the CGST Act, 2017, for offences like issuing invoices without supply or availing ITC using such invoices, does not depend on the completion of assessment. The Division Bench also rejected arguments that arrest is impermissible before adjudication or assessment, and that protection against arrest should not be granted in cases involving significant revenue loss, even if offences are compoundable. Applying these principles, and noting that the Department was still conducting further investigation into TEPL's alleged GST evasion of Rs. 11,80,95,716/- through non-issuance of invoices, the Court concluded that it was not a fit case to grant anticipatory bail. The prayer for anticipatory bail was accordingly rejected.

Facts

The petitioners, directors of M/s. Transworld Educare Private Limited (TEPL), filed a Criminal Petition under Section 438 Cr.P.C. seeking anticipatory bail. The Directorate General of GST Intelligence (DGGI) initiated proceedings against TEPL, alleging that the company provided taxable services without issuing invoices and failed to pay GST on the consideration received. This resulted in an alleged revenue loss of Rs. 11,80,95,716/- to the government exchequer for the period from July 2007 to December 2019. The investigation involved the recovery of documents and a statement from the Chairman and CEO (A-1). The petitioners claimed innocence, stating they were unaware of the company's operations managed by A-1 and were falsely implicated. They also expressed apprehension of coercive measures.

Key Issues

1. Whether the petitioners are entitled to anticipatory bail in connection with the alleged evasion of GST by TEPL, considering their role as Directors and the ongoing investigation? (Section 438 Cr.P.C. and Section 132 CGST Act, 2017) Petitioner's Arguments: The petitioners argued they are innocent, not connected to the alleged offences, and falsely implicated. They contended that no offence under Section 132 of the CGST Act, 2017, is made out against them, as the company's operations were solely managed by A-1, and they were merely directors unaware of the activities. They also expressed apprehension of being falsely implicated and coerced into confession by the respondent authority. Respondent's Arguments: The respondent opposed the bail application, stating the petitioners, as directors, were summoned thrice but failed to appear, indicating non-cooperation. They argued that the petitioners' application was based on assumptions to avoid statutory proceedings. The respondent emphasized the complexity of financial frauds and the risk of record manipulation if bail were granted. They relied on this Court's orders in Crl.P.No.5324 of 2019 and a Division Bench order in W.P.No.4764 of 2019 and Batch.