Hiten Jayendrakumar Mandaliya vs. State Of Gujarat

Held

The High Court, after hearing both sides, decided to exercise its discretion and enlarge the applicant on regular bail. The Court explicitly stated that it was not expressing any opinion on the merits of the case or the arguments canvassed by either side. The Court found the case to be a fit one for exercising discretion in favour of the applicant. Consequently, the application was allowed, and the applicant was ordered to be released on regular bail upon executing a personal bond of Rs. 50,000/- with one solvent surety of the like amount to the satisfaction of the learned Trial Court. Specific conditions were imposed, including not misusing liberty, not acting prejudicially to the prosecution, surrendering passport, not leaving Gujarat without permission, marking presence at the police station periodically, and furnishing residential address. The Court also directed that the applicant should only be released if not required in connection with any other offence and that the Trial Court should not be influenced by the preliminary observations made by the High Court during the bail proceedings.

Facts

The applicant, Hiten Jayendrakumar Mandaliya, filed an application for regular bail under Section 439 of the Code of Criminal Procedure. The bail application was filed in connection with File No. DCST/ENF/ACST-4/Hiten Mandaliya/ Arrest/2019-20/B-2, dated 6.12.2019, initiated by the Assistant Commissioner of State Tax, Gujarat State, Vadodara. The alleged offences are under Sections 132(1)(b)(c)(i) and 132(2) of the Gujarat Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Act, 2017. The applicant's counsel stated that the alleged input tax evasion was to the extent of approximately Rs. 29 lakh concerning Shringar Jewellers and that the offence was bailable under Section 132(iii). The applicant had also been released on default bail in connection with Datar Enterprise.

Key Issues

1. Whether the alleged offence under the Gujarat Goods and Services Tax Act, 2017, and Central Goods and Services Tax Act, 2017, is bailable or non-bailable, considering the amount of input tax evasion and the relevant penal provisions (Section 132(1)(b)(c)(i) and 132(2) versus Section 132(iii))? Petitioner's Arguments: The applicant argued that the offence alleged is bailable under Section 132(iii) of the Act, as the punishment is imprisonment up to one year with a fine. They also submitted that the applicant has already been released on default bail in another matter and that considering the nature of the allegations and the amount of input tax, the applicant should be enlarged on bail. Revenue's Arguments: The State opposed the bail application, contending that the applicant was part of a well-thought scam involving evasion of input tax exceeding Rs. 5 crore across various firms. They argued that the offence falls under Section 132(i) of the GST Act, which carries a sentence of imprisonment up to five years with a fine, and not Section 132(iii). Therefore, due to the gravity of the offence, the applicant should not be released on bail.