Rakesh Kumar Gupta vs. Union Of INDIA

Held

The Court allowed the bail application, directing the applicant's release on furnishing a personal bond of Rs. 10,00,000/- with two local solvent sureties. The Court noted that the applicant was issued summons for appearance on different dates, and therefore, his detention could not be termed illegal at that stage. It was observed that the applicant had cooperated with the investigation by making himself available and that his statement was recorded even in jail. Crucially, the respondent had not expressed any apprehension of flight risk, had not moved any application for police remand, and had not expressed any fear of tampering with evidence or influencing witnesses. Therefore, in view of the overall facts and circumstances, and without expressing any opinion on the merits of the case, the bail was granted. The Court imposed several conditions for the bail, including cooperation with the investigation/trial, not inducing witnesses, not committing further offences under the GST Act, not seeking unnecessary adjournments, not leaving India without permission, and surrendering passports. The issue regarding the validity of considering GST returns for 2018-19 to 2019-20 and the justification of arrest based on the amount of liability was not expressly decided on merits but factored into the grant of bail due to the lack of apprehension from the respondent.

Facts

The applicant, Rakesh Kumar Gupta, proprietor of R K Agro Industries, filed a bail application under Section 439 of the Cr.P.C. He was arrested by the CGST Officer, Unit Gwalior, in connection with an offence under Section 132 (1) (b) and (c) of the GST Act. The applicant contended that he was falsely implicated, wrongly detained, and that his GST returns for 2018-19 to 2019-20 could not be considered as he had already been assessed for those years in November 2021, and any reassessment or inquiry should not extend beyond six months as per Section 61 of the CGST Act. He also argued that his total GST liability for 2021-2023 was less than five crores, making his arrest unjustified. The respondent opposed the bail, stating that the procedure was followed by issuing summons and highlighting the gravity of the offence and the applicant's role in making invoices and selling grains to IT companies.

Key Issues

1. Whether the applicant's detention by the CGST officers was illegal, considering the issuance of summons and the subsequent preparation of arrest documents and summons after an application under Section 97 of Cr.P.C. was filed. 2. Whether GST returns for the period 2018-19 to 2019-20 could be considered in the present inquiry, given the applicant's prior assessment in November 2021 and the six-month limitation under Section 61 of the CGST Act. 3. Whether the applicant's arrest was justified, considering his total GST liability for the period 2021-2023 was less than five crores, as per the GST portal information. Petitioner's Arguments: The applicant argued that his detention was illegal and that the respondent prepared documents showing arrest and issuance of summons only after an application was filed before the Judicial Magistrate. He contended that the GST returns for 2018-19 to 2019-20 could not be considered due to prior assessment and the time limit under Section 61 of the CGST Act. He also argued that his arrest was unjustified as his total GST liability was less than five crores. He relied on the Supreme Court's decision in State of Gujarat vs. Choodamani Parmeshwaran Iyer and others regarding safeguards before arrest. He further argued that the respondent did not require him for interrogation, had not applied for police remand, and had no apprehension of flight risk or tampering with evidence. Respondent's Arguments: The respondent opposed the bail application, arguing that the procedure was followed by issuing summons. They submitted that the applicant was involved in making invoices and selling grains to IT companies and that the gravity of the offence and the applicant's role did not entitle him to bail.