Kamal Ray vs. The State Of Jharkhand

Facts

The petitioner, Kamal Ray, is an accused in Chaibasa Sadar P.S. Case No. 20 of 2019. The allegation is that the petitioner allowed his rented office premises at F.S. Tower, 2nd Floor, Chaibasa, to be used by Rakesh Kumar Garg, proprietor of M/s. Tirupati Enterprises, for registration purposes. The petitioner allegedly disclosed no knowledge of Rakesh Kumar Garg, despite renting the office space to him. The rented premises were taken for Rs. 4,484/- per month for three years, with a condition against subletting. The petitioner is alleged to have deposited online fees for VAT and GST registration of M/s. Tirupati Enterprises through his bank account. TIN and GSTIN numbers were issued to Rakesh Kumar Garg. The revenue loss to the State Government is alleged to be Rs. 2,25,64,665.30/-. The petitioner has been in custody since January 19, 2021.

Held

The Court granted bail to the petitioner, Kamal Ray, considering his period of custody since January 19, 2021. While the judgment does not explicitly address the legal issues raised regarding Sections 72, 73, and 132 of the Jharkhand Goods and Services Tax Act, 2017, or the arguments concerning the determination of demand prior to initiating proceedings under Section 132, the operative direction is the release of the petitioner on bail. The Court's decision to grant bail appears to be primarily based on the duration of custody. The specific findings on the procedural compliance of Sections 72 and 73, or the validity of initiating proceedings under Section 132, are not detailed in the provided text. The ratio decidendi for granting bail is the substantial period of incarceration. The Court directed the petitioner to be released on furnishing a bail bond of Rs. 10,000/- with two sureties of the like amount to the satisfaction of the learned Chief Judicial Magistrate, Chaibasa, in connection with Chaibasa Sadar P.S. Case No. 21 of 2019.

Key Issues

1. Whether the petitioner's alleged act of allowing his rented premises to be used for the registration of M/s. Tirupati Enterprises, without knowledge of its proprietor, constitutes an offence under the Jharkhand Goods and Services Tax Act, 2017, particularly concerning Sections 72 and 73, and whether the procedural mandates therein were followed? (Mixed question of law and fact) 2. Whether the initiation of proceedings under Section 132 of the Jharkhand Goods and Services Tax Act, 2017, for punishment and setting out offences, is permissible prior to the determination of the demand due from the assessee? (Question of law) Petitioner's arguments: The petitioner contends that the sole allegation is the use of his business premises by the principal accused, and he has no connection with M/s. Tirupati Enterprises. He argues that the mandates of Sections 72 and 73 of the Jharkhand Goods and Services Tax Act, 2017, were not followed. He relies on a Madras High Court judgment stating that Section 132 proceedings can only be initiated after determining the demand due. He also points out that his name was not mentioned in a letter dated 16.01.2019 recommending FIR institution and that he is not the ultimate beneficiary. State's arguments: The State opposes the bail prayer, alleging the petitioner is the mastermind of the fraudulent exercise and caused revenue loss. They highlight that the petitioner is also accused in another case (Chaibasa Sadar P.S. Case No. 21 of 2019) involving M/s. Balaji Enterprises, whose business place is also the petitioner's office. The State asserts that proceedings under Sections 72 and 73 were duly followed after issuing show cause notices, and final adjudication orders have been passed.