Siya Ram Yadav S/O Shri Bansi Dhar Yadav vs. Union Of INDIA

Held

The Court granted anticipatory bail to the petitioner, Siya Ram Yadav. The primary reasoning was that the crucial question of whether the tax is leviable under Rule 31A or Rule 33 of the CGST Rules is pending before the Supreme Court. The Supreme Court has consolidated all such cases and has also issued orders for 'No Coercive Action' against the petitioners in those matters. The Court noted that the petitioner's company has already deposited ₹9.71 crore, and the company's bank account, which was attached, has been unfrozen. The petitioner has been in custody since April 11, 2024, and further investigation from custody is not deemed necessary. The Court distinguished the cited cases by the respondents, stating that those involved fabrication of documents and claiming fraudulent ITCC benefits, unlike the present case where the dispute is about the rate of tax applicable. The Court emphasized that until it is decided which tax rate is applicable, no offense of tax evasion can be established.

Facts

The petitioner, Siya Ram Yadav, is seeking anticipatory bail in a criminal case registered under Section 132(1)(a), (f), and (i) read with Section 132(1)(i) and (4) of the Central Goods and Services Tax Act, 2017. The allegations are that the petitioner, as a director of an online gaming company, "M/s Metque Plays Services Pvt. Ltd.," which operates an online lottery platform, "Viha Loom," facilitated the receipt of ₹33,58,31,110 through online betting from April 2023 to February 2024. This amount allegedly attracted GST of ₹9,92,30,793, which was not deposited. The dispute centers on whether GST is leviable under Rule 31A or Rule 33 of the CGST Rules, and the exact tax liability is yet to be determined. The petitioner has deposited ₹9.71 crore and the company's bank account has been unfrozen. The petitioner has been in custody since April 11, 2024.

Key Issues

1. Whether the petitioner is entitled to anticipatory bail given the ongoing dispute regarding the applicable GST rules (Rule 31A vs. Rule 33) and the pending determination of the exact tax liability by the Supreme Court? The petitioner argued that the core issue is the interpretation of statutory provisions regarding taxability, not tax evasion. They contended that the Supreme Court is seized of the matter concerning the applicability of Rules 31A and 33, and has issued 'No Coercive Action' orders in similar cases. The petitioner also highlighted that a significant amount has been deposited, and the company's bank account has been unfrozen. Furthermore, the petitioner has been in custody since April 11, 2024, and a co-accused has already been granted bail. The respondents (Union of India and Intelligence Officer) argued that Rules 31A and 31B of the CGST Rules were not challenged, and the petitioner was liable to pay tax as per these rules, which they failed to do, resulting in an outstanding tax liability of approximately ₹133 crore. They asserted that the offense is economic in nature with far-reaching consequences and that similar bail applications have been dismissed by higher courts. They also stated that the procedure for Rules 31A and 31B has not been stayed by any court.