Paresh Nathalal Chauhan vs. State Of Gujarat

Facts

The petitioner, Paresh Nathalal Chauhan, filed a successive bail application before the Gujarat High Court. He was arrested on December 30, 2019, by the Assistant Commissioner of State Tax, Enforcement, Ahmedabad, for alleged offenses under Section 132(1)(b)(c) of the Central Goods and Services Tax Act, 2017, and the Gujarat Goods and Services Tax Act, 2017, under powers exercised by Section 69 of the respective Acts. His earlier bail application was rejected by the High Court on May 5, 2020, citing ongoing investigation, potential for more accused, scrutiny of 92 beneficiary firms, and a loss of Rs. 60 Crores to the public exchequer. This order was upheld by the Supreme Court, which dismissed his Special Leave to Appeal (Cri.) No. 4050 of 2020 as withdrawn. The petitioner argued that the investigation had progressed and he had undergone 16 months of incarceration, with Rs. 36.94 Crores recovered. The State opposed the bail application.

Held

The Court held that there was no substantial change in circumstances since the rejection of the applicant's earlier bail application. The Court noted that the recovery of Rs. 14,10,87,517/- mentioned in the earlier affidavit was already considered by the Court when it passed the order dated May 5, 2020. Although the total recovery had increased to Rs. 36.94 crore by December 1, 2020, the Court found this insufficient to warrant a change in its previous stance. The Court reiterated the findings from the previous order, emphasizing that 92 beneficiary firms were still under scrutiny, the loss to the public exchequer was Rs. 60 crores, and the investigation was still in progress. The Court concluded that releasing the applicant at this stage would be a potential threat to the investigation. Therefore, the Court was not inclined to grant any relief and dismissed the application. The ratio decidendi is that a successive bail application will not be entertained without demonstrating a substantial change in circumstances from the previous rejection, especially when the investigation is ongoing and involves significant financial implications for the exchequer.

Key Issues

1. Whether the applicant is entitled to be enlarged on regular bail under Section 439 of the Code of Criminal Procedure, 1973, given the progress of investigation and the amount of incarceration undergone? The petitioner argued that the investigation had substantially progressed since his earlier bail application was rejected and that he had already undergone approximately 16 months of incarceration. He further pointed to the affidavit stating that Rs. 36.94 Crores had been recovered, with recovery proceedings ongoing, as a factor warranting his release. The respondent (State of Gujarat) contended, based on the previous High Court order, that the investigation was still in progress, involving a large number of beneficiary firms and a significant loss to the public exchequer (Rs. 60 Crores). They argued that releasing the petitioner would pose a potential threat to the investigation and that there had been no substantial change in circumstances since the previous rejection.