Ratnambar Kaushik vs. Union Of INDIA

Held

The Supreme Court held that the petitioner should be released on bail. While acknowledging the allegations of clandestine transportation of unmanufactured tobacco for tax evasion, the Court noted that the matter was at large before the trial court and refrained from making detailed observations on the merits to avoid prejudicing either party. For the limited purpose of considering the bail application, the Court took note of the contentions. The Court emphasized that the petitioner had been arrested on 21.07.2022, the investigation was complete, and a charge sheet had been filed. The punishment for the alleged offence under Section 132(1)(l)(i) of the GST Act could extend to five years imprisonment and a fine. The petitioner had already undergone incarceration for more than four months, and the completion of the trial would inevitably take time. The Court also reasoned that the evidence to be presented by the respondent would primarily be documentary and electronic, with ocular evidence from official witnesses, thus minimizing the apprehension of tampering or influencing. Therefore, considering these aspects, the Court found it appropriate to grant the bail application. The operative direction was to release the petitioner on bail subject to conditions to be imposed by the trial court, including the deposit of his passport, and to ensure his diligent participation in the trial.

Facts

The petitioner, Ratnambar Kaushik, filed a Special Leave Petition before the Supreme Court of India challenging an order dated 21.10.2022 passed by the High Court of Judicature at Rajasthan, Jaipur Bench. The High Court had dismissed the petitioner's bail application filed under Section 439 of the Code of Criminal Procedure. The petitioner was seeking bail in proceedings related to alleged offences under Section 132(1)(a), (h), (k), and (l) read with Section 132(5) of the Central Goods and Services Tax Act, 2017. The allegations involve the clandestine transportation of 90,520 kgs of raw unmanufactured tobacco by 7 trucks, purportedly for the manufacture and supply of zarda without payment of leviable duties and taxes. The petitioner was arrested on 21.07.2022, and a charge sheet has been filed. The disputed tax/duty and cess amount is substantial, with the respondent claiming it to be ₹15,57,28,345/-.

Key Issues

1. Whether the petitioner is entitled to be released on bail under Section 439 of the Code of Criminal Procedure, 1973, considering the nature of the alleged offences under Section 132(1)(a), (h), (k), and (l) read with Section 132(5) of the Central Goods and Services Tax Act, 2017 and the stage of investigation and trial? Petitioner's arguments: The petitioner contended that the allegations made by the respondent were far-fetched. They argued that even if the tax was reckoned on the stated quantity of tobacco, the GST would only amount to ₹1,93,26,020/-, and the higher amount claimed by the respondent was based on projected manufacture without proof. The petitioner argued that these allegations were made solely to deny bail and establish a cognizable and non-bailable offence. They also highlighted that the investigation was complete, charge sheet filed, and they had already undergone incarceration for over four months, with the trial likely to take time. Respondent's arguments: The respondent alleged that the petitioner clandestinely transported raw unmanufactured tobacco for the manufacture and supply of zarda without payment of leviable duties and taxes. They claimed the total tax/duty and cess involved would be ₹15,57,28,345/-, based on projected manufacture of zarda pouches. The respondent also pointed to the detection of transportation of a larger quantity of unmanufactured tobacco based on toll/RFID data.