Inder Partap Singh vs. State Of Haryana

Held

The High Court allowed the petition, setting aside the condition imposed by the Trial Court requiring the petitioner to pay the entire outstanding GST liability of Rs. 1,94,78,017/- (as determined by the Additional Sessions Judge) along with interest. The Court reasoned that such an onerous condition for bail is unreasonable and violates Article 21 of the Constitution, as bail is the rule and jail is the exception. The Court referred to its own precedent in Ranjit Singh's case, which held similar conditions to be unsustainable. The Court also noted that the offence, based on the determined liability, would be bailable under Section 69(3) and Section 132(4) of the GST Act. Consequently, the bail bonds of Rs. 50 lakhs with one surety were reduced to Rs. 25 lakhs, to be furnished in the form of immovable property. The impugned order of the Additional Sessions Judge was modified to this extent, with other conditions remaining intact.

Facts

The petitioner, Inder Partap Singh, proprietor of M/s Shri Balaji Wooltex, is facing prosecution under various sections of the Indian Penal Code for allegedly wrongly availing input tax credit, causing a loss of approximately Rs. 2.24 crores to the government exchequer. After his arrest, the Trial Court granted him regular bail, but imposed stringent conditions: furnishing bail bonds of Rs. 50 lakhs with one surety and paying the entire outstanding GST liability along with interest. The petitioner challenged these conditions before the High Court, arguing they violate the Goods & Services Tax Act, 2017, and conflict with a previous High Court ruling in Ranjit Singh vs. State of Haryana.

Key Issues

1. Whether the condition imposed by the Trial Court for furnishing bail bonds of Rs. 50 lakhs with one surety and paying the entire outstanding GST liability along with interest, as a condition for granting regular bail, is sustainable in light of the provisions of the Goods & Services Tax Act, 2017 and Article 21 of the Constitution of India? The petitioner argued that the imposed conditions are unsustainable as they are unreasonable and in direct conflict with the law laid down by the High Court in Ranjit Singh's case, which held similar conditions to be unreasonable and violative of Article 21. The petitioner relied on the principle that bail is the rule and jail is the exception, and that personal liberty should not be deprived based solely on the seriousness of the charge or the potential for recovery proceedings. The State, through its counsel, fairly conceded that the judgment in Ranjit Singh's case fully covers the petitioner's case and that the State has not challenged this judgment before the Supreme Court.