Hemant Kasera vs. Union Of INDIA Central GST

Held

The Court allowed the bail application. Regarding the issues raised, the Court considered that the investigation had been completed and a charge sheet/complaint had been filed before the jurisdictional court. It also took into account that the maximum punishment provided under the CGST Act is up to 05 years and that the offense is compoundable. The Court found it relevant that the applicant had been in jail since April 3, 2024, and referred to the Apex Court's order in Special Leave to Appeal (Crl.) No(s).8740/2024. While not commenting on the merits of the case, the Court was inclined to grant regular bail. The applicant was directed to furnish a personal bond of Rs. 1,00,000/- with one solvent surety. Conditions were imposed, including cooperation with any further investigation and not tampering with evidence. The Court did not expressly leave any issue undecided, but the decision was based on the stage of the proceedings, the nature of the offense, and the applicant's period of incarceration.

Facts

The applicant, Hemant Kasera, filed a bail application under Section 439 of the CrPC after being arrested in connection with Crime No. 01/F.I.C./G.S.T./2024-25, registered by the Central GST Department, Raipur. The prosecution alleges that the applicant formed thirteen bogus firms and evaded tax, making him liable under Sections 132(1)(b), 132(1)(c), and 132(1)(1)(1) of the GST Act. The applicant has been in custody since April 3, 2024. The charge sheet has been filed, and the framing of charges and examination of witnesses are pending. The applicant claims to suffer from various health issues requiring regular treatment. The revenue argued that further investigation is required and there is a likelihood of tampering with evidence.

Key Issues

1. Whether the applicant can be held liable under Sections 132(1)(b), 132(1)(c), and 132(1)(1)(1) of the Central Goods and Services Act, 2017, solely on the allegation of tax evasion, especially when statements of witnesses are contradictory regarding the liability for creating bogus firms. 2. Whether the applicant's alleged involvement in the creation of different firms for sale and purchase of materials, and the subsequent cancellation of registrations, necessitates further ascertainment of tax liability by GST authorities before concluding guilt. 3. Whether the applicant can be held liable under Section 132(1) of the Act if the tax liability exceeds a certain amount, which is yet to be ascertained, and if the tax evasion warrants imprisonment. Contentions of the Petitioner (Applicant): - Mere evasion of tax does not automatically lead to liability under Section 132(1)(b), (c), and (1)(1)(1) of the GST Act. - Witness statements are contradictory, with some implicating another individual (Afsana Begum) for creating bogus firms while the applicant is charged for the same offense. - Liability for taxation in respect of different transactions involving various firms needs to be ascertained. - The applicant suffers from serious health conditions requiring specialized medical treatment. - Charge sheet has been filed, further investigation is not required, and there is no risk of influencing witnesses. - The maximum punishment is 05 years, and the applicant has been in jail since April 3, 2024. Reliance on Apex Court judgment dated 26.07.2024 in SLP (Crl.) No(s).8740/2024. Contentions of the Non-Applicant (Union of India): - Despite the charge sheet being filed, further investigation is required and may take approximately 4 months. - There is a likelihood that the applicant would tamper with evidence if granted bail. Reliance on Apex Court judgment dated 17.04.2020 in SLP (Crl.) No(s). 1803/2020 (Sandeep Goyal v. Union of India).