Subhash Kumar Singh vs. The State Of Assam And Anr.

Held

The Court held that the arrest of the petitioner was not illegal or arbitrary. Prima facie, the evasion of tax exceeded Rs. 5 crores, necessitating the arrest under Section 132(1)(i) of the Assam GST Act, 2017. The Court found that the petitioner was the originator of fake invoices, with direct documentary evidence of his active involvement in tax evasion. The investigation is ongoing to ascertain the location of godowns, examine witnesses, and calculate interest. The Court reasoned that releasing the petitioner on bail at this stage would likely hamper the investigation and tamper with evidence. The Court also clarified that Sections 69 and 132 of the AGST Act operate in different fields, and adjudication proceedings are not a prerequisite for the Commissioner to form a "reason to believe" that an offense has been committed under Section 69. The Principal Commissioner of State Tax, Assam, rightfully issued the warrant after examining materials. Therefore, the prayer for bail was rejected. The observations made are limited to the bail application and will not impact the trial or other proceedings.

Facts

The petitioner, Subhash Kumar Singh, filed an application for bail under Section 439 of the Cr.PC. He was arrested on July 12, 2021, in connection with BI(E.O.) Assam Tax P.E. No. 03(03)/2021, registered under Section 132(1)(i) of the Assam GST Act, 2017. The Superintendent of State Tax, Assam, alleged that the petitioner was involved in tax evasion exceeding Rs. 5,00,00,000/- by deliberately supplying goods without issuing invoices between 2019 and 2021. The total evasion detected, including tax, cess, penalty, and interest, was Rs. 22,77,13,211.04, with evaded tax and cess amounting to Rs. 10,22,31,514.18. The petitioner's bail petition before the Chief Judicial Magistrate was withdrawn. The petitioner argued that the arrest and remand procedures did not comply with the guidelines in Arnesh Kumar v. State of Bihar, especially considering the COVID-19 pandemic.

Key Issues

1. Whether the arrest and subsequent remand of the petitioner were illegal and arbitrary, violating the principles laid down in Arnesh Kumar v. State of Bihar and subsequent directions regarding COVID-19 pandemic protocols? (Section 132(1)(i) of the Assam GST Act, 2017, Sections 41 and 41A of Cr.P.C., Supreme Court orders in SuoMotu Writ Petition (C) No.1/2020). Petitioner's Arguments: The petitioner contended that the arresting authorities and the court below failed to follow the guidelines in Arnesh Kumar v. State of Bihar, which mandates adherence to Sections 41 and 41A of the Cr.P.C. for offenses punishable with imprisonment up to seven years, and that detention should not be authorized mechanically. The petitioner also argued for release on bail due to the ongoing COVID-19 pandemic and cited Akhil Krishna Maggu & Anr. –Vs- DDDG of GST Intelligence, P&H High Court, for the proposition that the power of arrest should not be exercised whimsically or for recovery. The petitioner also stated he is a registered dealer, has appeared when summoned, is a reputed businessman with no prior convictions, and poses no flight risk. Revenue's Arguments: The judgment does not explicitly record arguments from the Revenue (State of Assam and Superintendent of State Tax) beyond Mr. Phukan, the learned Public Prosecutor, who referred to the Supreme Court's order in SuoMotu Writ Petition (C) No.1/2020, emphasizing the need to control arrests in contravention of Arnesh Kumar guidelines to decongest prisons. The judgment later addresses the legality of arrest under Section 69 and Section 132 of the AGST Act.