In GST regime, the arrest measures are prescribed to deter the citizens from indulging into activities leading to revenue loss. However, in multiple instances, it has been observed that the Tax Authorities have to take shed of stringent provisions and arrest the persons accused of committing specific category of offences in which arrest powers can be exercised by the tax authorities.
However, considering the time frame involved in investigation and trial of offences, the accused seeks release on bail. However, due to the stringent provisions in respect of bail, specifically in respect of cases involving higher stakes, multiple cases reach before various High Courts and Apex Court either for seeking bail or challenging the rejection or grant of bail lower forums.
At this juncture, a curiosity arises in mind, which is that while addressing the applications, what risks does the Court consider? Let’s dive in to the factors considered by courts while deciding such applications.
Legal Provisions
Section 69 of Central Goods and Service Tax (‘CGST’) deals with provisions in relation to arrest of a person accused of committing certain offences.
Sub-section (1) of Section 69 provides that where the Commissioner has reasons to believe that a person has committed an offence specified under clause (a) to clause (d) of Section 132(1), and punishable under clause (i) or clause (ii) of sub-section 1, or sub-section 2 of the said section, he may by order authorize any officer of central tax to arrest such person.
Further Section 132(5) provides that the offences specified in clause (a) to clause (d) of Section 132(1), and punishable under clause (i) or clause (ii) of sub-section 1, shall be cognizable and non-bailable.
However, Section 483 of Bhartiya Nagrik Suraksha Sanhita(‘BNSS’) 2023 (similar to Section 439 of Criminal Procedure Code) provides for Special powers of High Court or Court of Session regarding bail. The said section provides as follows:
(1) A High Court or Court of Session may direct,-
(a) that any person accused of an offence and in custody be released on bail, and if the offence is of the nature specified in sub-section (3) of section 480, may impose any condition which it considers necessary for the purposes mentioned in that sub-section;
(b) that any condition imposed by a Magistrate when releasing any person on bail be set aside or modified:
Provided that the High Court or the Court of Session shall, before granting bail to a person who is accused of an offence which is triable exclusively by the Court of Session or which, though not so triable, is punishable with imprisonment for life, give notice of the application for bail to the Public Prosecutor unless it is, for reasons to be recorded in writing, of opinion that it is not practicable to give such notice:
Provided further that the High Court or the Court of Session shall, before granting bail to a person who is accused of an offence triable under section 65 or sub-section (2) of section 70 of the Bharatiya Nyaya Sanhita, 2023, give notice of the application for bail to the Public Prosecutor within a period of fifteen days from the date of receipt of the notice of such application.
(2) The presence of the informant or any person authorised by him shall be obligatory at the time of hearing of the application for bail to the person under section 65 or sub-section (2) of section 70 of the Bharatiya Nyaya Sanhita, 2023.
(3) A High Court or Court of Session may direct that any person who has been released on bail under this Chapter be arrested and commit him to custody.
From a perusal of the above legal provisions, it can be inferred that though the offences covered under clause (a) to clause (d) of Section 132(1), and punishable under clause (i) or clause (ii) of sub-section 1, are cognizable and non-bailable, however, the Courts may exercise their powers under Section 483 of BNSS 2023 and grant bail to the accused.
The question which arises here is while exercising its powers under Section 483, what factors does Court consider while deciding whether to grant bail or not. Also, what are the conditions that court generally put on the accused while granting such bail.
The Judicial Precedent
A similar question had come up before the Hon’ble High Court of Delhi in the case of Directorate General of GST Intelligence vs Rakesh Kumar Goyal (2025-VIL-671-DEL) where in the petitioner had preferred a petition to recall the bail granted to the respondent, inter-alia on the grounds of lack of co-operation during the investigation.
In the said case, the Hon’ble court emphasized on factors to be considered while granting the bail in a case which is at the stage of investigation and how these factors fade into the background and other factors need consideration at a point of time when the Charge sheet gets filed.
In para 36 of the Judgment, the Hon’ble High Court relied upon the Bombay High Court’s judgment in the case of Laxman Irappa Hatti vs State of Maharashtra, (2004) CRILJ 3802 and held that the considerations for grant of Bail at the stage of investigation which are material is
1.Whether the accused would present himself for investigation and cooperate in the investigations; and
2. Whether he would not hamper the investigations or tamper with the evidence of witnesses
Further, in para 37 of the judgement the Hon’ble High Court emphasized that once the chargesheet gets filed, the above considerations fade into background and what becomes material is to consider the gravity of the offence along with the Triple Test i.e.:
- Whether the accused in at flight risk,
- Whether the accused would be able to influence the witness, or
- Whether the accused would be able to tamper with the witness
Since in the said case, the chargesheet had already been filed, the court emphasized on the latter factors while considering the application filed by the petitioner.
Conclusion
The legal provisions and the above case laws provides a reference to importance of the various factors and how these factors change with the changing stages of the case.
It is equally important for the accused taxpayers to understand their obligations and rights on the basis of factors considered by the Courts while granting the bail to avoid committing any error and prevent themselves from any undue harassment. However, it is also important to note here that the above list is not exhaustive in nature and the decision of the Court may vary in each case on the basis of other facts available before the Court for consideration.
Author Bio
