Nitesh Wadhwani vs. Union Of INDIA Thr. Department Of Revenue Inteligendce And Director General Of Goods And Service Tax

Held

The Court allowed the petitions for anticipatory bail, including that of Nitesh Wadhwani. While acknowledging the gravity of economic offences and the arguments presented by the revenue regarding the petitioner's alleged involvement through his media company and retracted statements under Section 70 of the GST Act, the Court found that the case for granting bail was made out. The reasoning for allowing bail was based on a careful consideration of the nature and gravity of the allegations, the specific evidence collected, the specific facts put forth by the petitioner, and other circumstances of the case. The Court explicitly stated that it was not commenting on the merits of the case. The operative directions included releasing the petitioner on bail upon furnishing a personal bond of Rs. 10,00,000/- with one solvent surety, subject to conditions such as cooperating with the investigation, appearing before the investigating officer monthly until the charge sheet is filed, and submitting his passport. The issue of the applicability of Section 438 Cr.P.C. in GST cases was noted as pending before the Supreme Court, but the High Court proceeded to grant relief.

Facts

This case involves a petition for anticipatory bail filed by Nitesh Wadhwani under Section 438 of the Cr.P.C. The petitioner is accused in a crime registered under Section 132(1)(a)(i) of the Goods and Services Tax (GST) Act, along with Sections 409, 467, 471, and 120-B of the IPC. The Directorate General of Goods and Services Tax Intelligence (DGGI) is the investigating authority. The petitioner's primary contention is that he is merely the landlord of the premises where his tenant allegedly evaded tax through clandestine sales of Pan Masala, and he has no direct involvement. The revenue, however, argues that the petitioner is the director of a media company, 'Dabang Dunia,' and vehicles involved in the alleged tax evasion bore its press stickers and identity cards. Furthermore, statements recorded under Section 70 of the GST Act allegedly implicate the petitioner as the owner and kingpin of various businesses involved in the illicit trade, with tax evasion running into crores of rupees.

Key Issues

1. Whether the petitioner is entitled to anticipatory bail under Section 438 of the Cr.P.C. in a case registered under the GST Act, considering the alleged tax evasion amounts to more than five crores rupees, making the offence cognizable and non-bailable under Section 132(5) of the GST Act? 2. Whether the statements recorded under Section 70 of the GST Act, which the petitioner claims were involuntary and have been retracted, can be relied upon by the revenue to deny bail? 3. Whether the petitioner's alleged non-cooperation with the investigation, including refusal to accept summons and an incident where officials were allegedly assaulted during a search, disentitles him from anticipatory bail? Petitioner's Arguments: The petitioner argues that he is only the landlord and not involved in the tenant's alleged tax evasion. He contends that statements recorded under Section 70 of the GST Act are unreliable as they were obtained under duress and have been retracted. He also claims that his alleged non-cooperation is due to apprehension of similar treatment as his uncle, who was allegedly arrested without due process. He is willing to cooperate if his rights are protected and proposes periodical appearance. Revenue's Arguments: The revenue contends that the petitioner's involvement is evidenced by the use of his media company's stickers and ID cards on vehicles used for clandestine transportation. Statements of co-accused under Section 70 of the GST Act allegedly identify him as the owner and kingpin of multiple firms involved in tax evasion worth crores. The revenue also highlights the petitioner's non-cooperation and an incident of assault on officials during a search, arguing these hinder investigation and disentitle him to bail. Reliance is placed on Supreme Court judgments regarding economic offences and the object of arrest.