Vivek vs. Union Of INDIA

Held

The Court dismissed the bail application. Regarding the applicability of Sections 467 and 471 IPC, the Court found it premature to express a definitive opinion but noted that the seriousness of allegations and the potential involvement of the petitioner in these offences could not be ruled out. On the issue of default bail under Section 167(2) Cr.P.C., the Court held that Section 467 IPC is punishable with life imprisonment, entitling the prosecution to a period of 90 days for filing the charge-sheet, thus denying default bail. The Court declined to express an opinion on the GST tax liability arising only upon supply, deeming it a matter of merits to be decided later, but acknowledged the seizure of goods and the petitioner's complicity. Concerning the necessity of a show-cause notice under Section 73, the Court held that as the case involved offences beyond simple tax evasion, including IPC offences, and that parallel proceedings for criminal liability and tax recovery are permissible, this plea was not accepted. On the admissibility of confessions, the Court held that it could not be said that they were made to police officers and hit by Section 24 of the Evidence Act, citing K.L. Pavunny for the admissibility of voluntary statements, and considered it too early to opine on inducement, threat, or promise. Considering the seriousness of the offences and the crucial stage of investigation, the Court found it inappropriate to enlarge the petitioner on bail.

Facts

The petitioner, Vivek Waretwar, sought bail under Section 439 Cr.P.C. after being arrested by the Directorate General of Goods and Services Tax (DGGSTI) on September 1, 2017. The arrest was in connection with a raid conducted on August 30, 2017, at premises where a large quantity of chewing tobacco and cigarettes were found, allegedly removed clandestinely from a factory without payment of Central Excise duty. The seized goods were stated to belong to the petitioner and were received without bills or delivery challans. The case involves offences under the Goods & Services Tax Act, 2017, the Central Excise Act, 1944, and sections of the Indian Penal Code, including 120-B, 467, and 471. The estimated tax evasion was around Rs. 70 Crores.

Key Issues

1. Whether the offences under Sections 467 and 471 read with Section 120-B of the IPC are prima facie made out against the petitioner? The petitioner argued that these sections are not applicable. The respondent contended that the use of forged brand names indicates commission of these offences. 2. Whether the petitioner is entitled to default bail under Section 167(2) of the Cr.P.C. due to the charge-sheet not being filed within 60 days? The petitioner argued that the offences are punishable with less than 10 years' imprisonment, thus attracting the 60-day period. The respondent countered that Section 467 of the IPC is punishable with life imprisonment, allowing a 90-day period for charge-sheet filing. 3. Whether the liability to pay GST tax arises only upon the supply of goods, as per Section 9(1) of the Act, and if so, whether tax evasion is established in this case? The petitioner argued that since no supply occurred, no tax liability arose. The Court deemed it inappropriate to express an opinion on this merits-related issue at this stage. 4. Whether criminal proceedings can be initiated without issuing a show-cause notice under Section 73 of the Act for demand and recovery of tax? The petitioner argued that such notice is a prerequisite. The respondent argued that the case involves more than just tax evasion, including IPC offences, and that parallel proceedings for criminal liability and tax recovery are permissible. 5. Whether alleged confessions made by the petitioner and others are admissible in evidence, being hit by Section 24 of the Indian Evidence Act? The petitioner argued that confessions were inadmissible. The respondent argued that statements were recorded without threat or inducement and are admissible, citing K.L. Pavunny.