Union of India Vs Arun Jindal S/o Shri Ashok Kumar Jindal (Rajasthan High Court)
The Rajasthan High Court considered an application filed by the Union of India seeking cancellation of bail granted to the accused for offences under Sections 132(1)(a), (f), (h) and (l) of the Central Goods and Services Tax Act, 2017. The prosecution argued that the trial court had committed a patent illegality by granting bail on the premise that deposit of 50% of the alleged tax evasion amount would render the offence compoundable and bailable under Sections 132 and 138 of the CGST Act. It was contended that the respondent had allegedly supplied goods without invoices, evading GST of ₹9.39 crore, and that the condition of depositing ₹5 crore was contrary to law and recent Supreme Court precedent holding that bail cannot be granted solely on the basis of monetary deposits.
The respondent opposed cancellation, submitting that bail was granted after considering statutory factors, custody period, maximum punishment of five years, and that ₹5 crore had already been deposited with the consent of the department. Reliance was placed on Supreme Court decisions where bail was granted in economic offences considering custody and proportionality.
The High Court examined Sections 132 and 138 of the CGST Act and held that offences involving tax evasion exceeding ₹5 crore are cognizable and non-bailable, and that partial deposit cannot change the nature of the offence or make it compoundable. The trial court’s analogy on compounding was found to be flawed. However, the High Court noted that bail was not granted solely on the basis of deposit. Other relevant considerations included the maximum punishment being five years, limited custody, absence of prior criminal history, low risk of witness tampering as witnesses were officials, and the fact that certain co-accused had been granted bail by the Supreme Court. The Court also observed that the Supreme Court judgment relied upon by the prosecution related to directions issued after grant of bail.
