Vikalp Jain vs. Union Of INDIA And 4 Others

Held

The Court held that no interference was required in the impugned orders passed by the lower court. The application for quashing the condition imposed by the lower court was rejected. The reasoning appears to be based on the gravity of the alleged evasion and the applicant's alleged active involvement, as submitted by the revenue. The Court did not delve into the specifics of whether a show cause notice was required at the bail stage or the legality of the amount, but rather deferred to the lower court's discretion in imposing the condition. The ratio decidendi is that the High Court, in its writ jurisdiction, will not interfere with bail conditions imposed by a lower court when there is an allegation of significant tax evasion and the applicant is alleged to be actively involved, unless there is a clear illegality or arbitrariness that shocks the conscience. The operative direction was the rejection of the application.

Facts

The applicant, Vikalp Jain, is involved in Case No. 17 of 2018 CIU CGST v. Vikalp Jain, under Section 132(1)(a) of the CGST Act. He approached the High Court seeking to quash a bail condition imposed by the lower court. The condition, stipulated in orders dated 11.12.2018 and 14.2.2019, requires the applicant to deposit Rs. 1 Crore in the Government Treasury within three months of his release on bail. The applicant claims innocence and false implication, arguing that no show cause notice was issued for the alleged tax evasion of Rs. 94 Crores and that the bail condition is harsh and illegal. The opposite party (Union of India and others) and the State opposed the prayer, asserting the applicant's active involvement in GST evasion exceeding Rs. 94 Crores.

Key Issues

1. Whether the condition imposed by the lower court for depositing Rs. 1 Crore as a bail condition is harsh and illegal, thereby warranting interference by this Court under its writ jurisdiction, particularly concerning Section 132(1)(a) of the CGST Act? Contentions of the Petitioner (Vikalp Jain): The applicant argued that he is innocent and falsely implicated. He contended that the Department had not issued any show cause notice regarding the alleged tax evasion of Rs. 94 Crores. Furthermore, the bail condition requiring a deposit of Rs. 1 Crore is asserted to be harsh and absolutely illegal. Contentions of the Opposite Party (Union of India and others) and State: The opposite party and the learned AGA vehemently opposed the prayer. They submitted that the applicant was actively involved in evading GST to the tune of more than Rs. 94 Crores, in violation of the provisions of the Central Goods and Service Tax Act, 2017, and the rules made thereunder.