Shailesh Maganbhai Patel vs. State Of Gujarat

Held

The Court granted anticipatory bail to the applicant. The primary reason for granting bail was the significant delay in the registration of the FIR, which was filed more than four years after the department became aware of the shortage of detained goods. The Court noted that despite the department's knowledge of the alleged selling/detention of goods, the FIR was registered belatedly. The Court also considered the pending civil proceedings related to the issue, the applicant's cooperation with the investigation, the fact that all documents and materials were in the custody of the Investigating Officer, and that custodial interrogation was not necessary at this stage. The Court acknowledged the arguments regarding the alleged violation of an undertaking and the outstanding government dues but found the delay in FIR registration to be a crucial factor. The Court relied on Supreme Court judgments in Sushila Aggarwal vs. State (NCT of Delhi) and Siddharam Satlingappa Mhetre vs. State of Maharashtra.

Facts

The applicant, Shailesh Maganbhai Patel, Managing Director of M/s. Regent Granito (India) Ltd., sought anticipatory bail. The FIR alleged that the company owed Central Excise Duty of Rs. 5,48,24,087/- between July 2015 and September 2016, with accrued interest and penalty, totaling Rs. 6,86,57,864/-. The department attached finished goods worth Rs. 6,90,02,232/- on November 10, 2016. However, on April 20, 2017, only goods worth Rs. 18,00,000/- were found, with the rest missing. The company faced financial crisis, was under IBC proceedings, and a liquidator was appointed. The FIR was registered on March 19, 2021, over four years after the initial attachment and discovery of missing goods.

Key Issues

1. Whether the detention of finished goods by the department was in accordance with the prescribed procedure under the Customs Rules, 1995 and Circular dated 15.12.1997, considering the alleged lack of an outstanding demand notice under Section 11(1) of the Central Excise Act? (Question of law) 2. Whether the delay in registering the FIR, particularly from April 20, 2017, when the shortage of goods was discovered, until March 19, 2021, renders the FIR an afterthought and warrants the grant of anticipatory bail? (Question of mixed law and fact) Petitioner's arguments: The department could not have detained goods without following proper procedure. There was no outstanding demand notice under Section 11(1) of the Central Excise Act. The company was facing financial crisis and was under IBC proceedings, with a liquidator appointed. The FIR was registered with gross and unexplainable delay, making it an afterthought. All documents are in the custody of the Investigating Officer, negating the need for custodial interrogation. The applicant has cooperated with the investigation. Revenue's arguments: The applicant violated an undertaking given on November 10, 2016, by selling the attached goods despite specific directions not to do so, given the outstanding government dues. A serious offense was committed by not paying dues and selling the goods meant to be preserved.