Paresh Nathalal Chauhan Vs State of Gujarat (Supreme Court)
Taxpayer cannot be detained for indefinite period for alleged tax evasion where investigation is pending
The Hon’ble Supreme Court of India in Paresh Nathalal Chauhan v. The State of Gujarat & Anr. [SLP (Crl) No. 009458 – 009459/2021, Criminal Appeal Nos.164-165/2022 dated February 01, 2022] granted bail to a person accused of tax evasion. Held that, assessee cannot be detained for indefinite period of time when the maximum sentence for such offence is 5 years and investigation w.r.t. the same is still pending.
Facts:
Paresh Nathalal Chauhan (“the Petitioner”) has filed this petition to seek bail for the alleged evasion of tax, who had been detained for 25 months out of a maximum period of 5 years for which the Petitioner can be sentenced. The Petitioner contended that the concerned officers preceded a search operation where the officers concerned occupied a house for more than a week with lady members, with an intent to teach the Petitioner a lesson, for having initiated proceeding which resulted in adverse orders against the Revenue Authority (“the Respondent”).
The Respondent contended that the Petitioner should not be on bail as the Petitioner has been a habitual offender engaged in violation of law and played an important role in execution of the scam and that confidential investigation is still under way in order to identify these persons.
Issue
Whether the Petitioner who has been accused of tax evasion can be granted bail where the investigation has not been completed?
Held:
The Hon’ble Supreme Court of India in SLP (Crl) No. 009458 – 009459/2021, Criminal Appeal Nos.164-165 /2022 dated February 01, 2022 held as under:
