Kamal Ray vs. The State Of Jharkhand

Facts

The petitioner, Kamal Ray, is an accused in Chaibasa Sadar P.S. Case No. 21 of 2019. The allegation is that the premises rented by the petitioner for his business, M/s. Kamal Associates, was used by M/s. Balaji Enterprises, whose proprietor is Brajesh Prasad Tiwary, for its registration. The petitioner allegedly facilitated this by renting out his office and depositing online fees for VAT and GST registration of M/s. Balaji Enterprises through his bank account. This alleged fraudulent exercise caused a loss of Rs. 1,09,56,094/- to the State. The petitioner has been in custody since January 19, 2021. The State contends the petitioner is the mastermind of the fraud.

Held

The Court granted bail to the petitioner, Kamal Ray. While the judgment does not explicitly decide the legal issues raised regarding the procedural compliance with Sections 72 and 73 of the Jharkhand Goods and Services Tax Act, 2017, or the applicability of the Madras High Court's precedent, it considers the submissions of both parties and the period of custody undergone by the petitioner. The Court notes that the petitioner has been in custody since January 19, 2021. The operative direction is to release the petitioner on bail. The specific findings on the legality of the GST proceedings or the petitioner's role as mastermind are not detailed as the primary focus of this order is on the bail application. The judgment does not expressly leave any issue undecided.

Key Issues

1. Whether the proceedings under Sections 72 and 73 of the Jharkhand Goods and Services Tax Act, 2017, were duly followed before initiating criminal proceedings, specifically concerning the determination of demand due from the assessee. Petitioner's arguments: The petitioner argues that the mandate laid down in Sections 72 and 73 of the Jharkhand Goods and Services Tax Act, 2017, has not been followed. He relies on a judgment from the Madras High Court in Writ Petition No. 5501 of 2019, stating that the power to punish and set out offences under Section 132 of the Act can only be initiated after it is established that an assessee has committed an offence, which requires prior determination of the demand due. The petitioner also points out that his name did not appear in the recommendation for the FIR and he is not the ultimate beneficiary. Revenue's arguments: The State opposes the bail prayer, highlighting the petitioner's modus operandi in causing loss to the State exchequer and alleging he is the mastermind. The State claims that proceedings under Sections 72 and 73 were duly followed after issuing a show cause notice, and a final adjudication order has been passed and uploaded on the portal.