Rakesh Arora vs. State Of Haryana

Facts

The petitioner, Rakesh Arora, filed a petition under Section 439 Cr.P.C. seeking regular bail. He was arrested in connection with FIR No. 115 dated 17.02.2018, registered under various sections of the IPC, the Prevention of Corruption Act, and Section 132 of the CGST Act. The allegations are that the petitioner, acting as a "Taxation Advisor," facilitated tax evasion for various assesses under the Haryana Value Added Tax Act and Central Government Sales Tax Act by creating shell firms, causing losses to the State Exchequer amounting to crores of rupees. The petitioner had been in custody for approximately nine months. Two government officials involved in the alleged tax evasion were arrested and subsequently released on bail.

Held

The Court granted regular bail to the petitioner. The primary reasoning for this decision was the fact that the Taxation Inspector, who was the "real facilitator" and whose connivance was essential for the tax evasion to occur, had already been released on bail. The Court reasoned that the petitioner, at most, is alleged to have created a platform that facilitated tax evasion, but the actual evasion was carried out by the beneficiaries and government officials. Considering the petitioner's nine-month period of incarceration and the release of the key official, the Court deemed it appropriate to grant bail without delving into the merits of the case. The operative direction was to release the petitioner on regular bail to the satisfaction of the trial court or duty magistrate. No issues were expressly left undecided.

Key Issues

1. Whether the petitioner is entitled to regular bail under Section 439 Cr.P.C. given the period of incarceration and the fact that co-accused officials have been released on bail? (Question of law and fact, turning on principles of bail and the role of the petitioner vis-à-vis the alleged tax evasion). Petitioner's Arguments: The petitioner argued that he has been in custody for about nine months. He contended that even if the allegations are true, the actual tax evasion was facilitated by paying bribes, and the two officials arrested for this facilitation have already been released on bail. This suggests that the petitioner's role, at most, was to create a platform for evasion, not the direct act of evasion itself. Respondent's (State of Haryana) Arguments: The State accepted the factual assertions made by the petitioner regarding the period of custody and the release of the officials. However, the State argued that the web created by the petitioner is "very expansive" and that there are other FIRs registered against him. The State did not present arguments against the grant of bail on merits but highlighted the broader scope of the petitioner's alleged involvement and the existence of other cases.