Isithore vs. The Senior Intelligence Officer

Facts

The petitioner, a chartered accountant and the sole accused, was arrested on June 28, 2023, and remanded to judicial custody. The Directorate General of GST Intelligence (DGGI) registered a case against the petitioner for alleged GST violations amounting to Rs. 122 Crores. The petitioner filed a petition for bail under Section 439 of the Cr.P.C. before the Madurai Bench of the Madras High Court. The petitioner's counsel argued that the actual GST payment error was only Rs. 25 lakhs and that the petitioner had been in custody for over seven months. The petitioner was willing to deposit Rs. 50,00,000/- to the respondent. The respondent's counsel agreed that the bail application could be considered if the deposit was made.

Held

The Court granted bail to the petitioner. The primary consideration for granting bail was the petitioner's willingness to deposit a sum of Rs. 50,00,000/- to the respondent by way of a demand draft within two weeks. The Court acknowledged the petitioner's submission regarding the alleged GST violation amount and the period of custody. The reasoning was based on the facts and circumstances of the case, coupled with the petitioner's offer to deposit a substantial sum. The ratio decidendi is that a willingness to deposit a significant amount towards the disputed tax liability can be a strong factor in granting bail, especially when the petitioner has been in custody for a considerable period. The operative directions included releasing the petitioner on bail upon executing a bond for Rs. 10,000/- with two sureties, depositing Rs. 50,00,000/- within two weeks, appearing daily before the respondent, surrendering the passport, and not tampering with evidence or absconding. The Court also referenced the Supreme Court's decision in P.K. Shaji Vs. State of Kerala regarding breach of bail conditions.

Key Issues

1. Whether the petitioner is entitled to be enlarged on bail under Section 439 of the Cr.P.C. in Crime No.DGG1/INV/GST/2247/2023-GrA-O/ODD/DGGI-RU, Trichy, considering the alleged GST violations and the period of custody? (Question of law and fact, turning on Section 132(1)(b) and (c) of the Central Goods and Service Tax Act and Section 439 of the Cr.P.C.). Petitioner's Arguments: The petitioner contended that the alleged GST violation amount of Rs. 122 Crores was an error, and the actual discrepancy was only Rs. 25 lakhs. The petitioner had already been in judicial custody for over seven months and was willing to deposit Rs. 50,00,000/- without prejudice to their rights. Respondent's Arguments: The respondent (DGGI) stated that if the petitioner deposited Rs. 50,00,000/-, the Court could consider the bail application.