Case Law Details

Case Name : Sri Subhash Kumar Singh Vs State of Assam (Gauhati High Court)
Appeal Number : Bail Application No. 2007 of 2021
Date of Judgement/Order : 15/09/2021
Related Assessment Year :

Subhash Kumar Singh Vs State of Assam (Gauhati High Court)

Heard Mr. AD Choudhury, learned counsel for the petitioner. Also heard Mr. M Phukan, learned Public Prosecutor.

[2] This is an application, filed under Section 439 of the Cr.PC. seeking bail of the accused-petitioner, namely, Sri Subhash Kumar Singh, in connection with BI (E.O) Assam Tax P.E. No. 03(03)/2021, under Section 132(1)(i) of the Assam GST Act, 2017.

[3] The scanned copies of the investigation report and the record of the case have been received and perused by this Court.

[4] The petitioner was arrested on 12.07.2021 in connection with the aforesaid case and has been in detention since then. It deserves a mention here that in the meantime, offence report has already been laid indicating thereby that investigation of the case has already been completed.

Supply of goods without issue of Invoice- HC grant Bail to GST evasion accused

[5] The genesis of the abovementioned criminal prosecution may be traced to when the petitioner was served with a notice under Section 50 of Cr.P.C. by the Superintendent of State Tax Assam, BIEO, Assam, Srimantapur, Guwahati-32 (hereinafter referred to as the respondent No. 2), in reference to B.I. (E.O.) Assam Tax P.E. No. 03(03)/2021 under the provision of Section 132(1) (i) of the Assam GST Act, 2017 (in short “the AGST Act”) alleging that sufficient materials have been found against the petitioner regarding his involvement in evasion of taxes and Cess, amounting to more than Rs. 5, 00, 00,000/- (Five Crores) which is a cognizable offence under Section 132(1)(i) AGST Act. It was further alleged that the petitioner is found to have deliberately supplied goods without issuing invoices in violation of the provisions of AGST Act with intention to evade Tax during the period of 2019 to 2021. Pursuant to issue of the said notice under Section 50 Cr.P.C. the petitioner was arrested on 12.07.2021 and was forwarded to the learned Chief Judicial Magistrate, Kamrup Metro, Assam vide the Forwarding Report, dated 12.07.2021, citing reasons therein, inter alia that, that the respondent No. 2 has ascertained that the petitioner has deliberately supplied goods without issue of invoices in violation of the provisions of the AGST Act with the intention to evade Tax and Cess.

[6] It is imperative to note that, from the scrutiny and examination of documents, the authorities found that the total evasion detected inclusive of applicable Tax, Cess, Penalty and Interest is Rs. 22,77,13,211.04/- (Twenty two crores seventy seven lakhs thirteen thousand two hundred eleven rupees and four paisa only) which includes the evaded Tax and Cess amounting to Rs. 10,22,31,514.18/- (Ten crores twenty lakhs thirty one thousand five hundred fourteen and eighteen paisa only) and accordingly the petitioner is found to have committed an offence punishable under Section 132(1)(i) of the AGST Act.

[7] Mr. Choudhury, learned counsel for the petitioner has submitted that since investigation of the case has been completed and formal offence report has been laid in the Court by the Investigating Agency, there is no scope at all for hampering with the investigation or tampering with any of the materials connected with the case. It has further been submitted by the learned counsel for the petitioner that the offence alleged in the instant case is compoundable in view of the provisions of Section 138 of the AGST Act. He has also referred to the judgment of the Hon’ble Supreme Court in the case of Sanjay Chandra vs. Central Bureau of Investigation, reported in (2012) 1 SCC 40 and particularly paras 24 and 46 thereof. Both the paras are reproduced below for convenience of discussion:-

24. In the instant case, as we have already noticed that the “pointing finger of accusation” against the appellants is `the seriousness of the charge’. The offences alleged are economic offences which have resulted in loss to the State exchequer. Though, they contend that there is possibility of the appellants tampering with the witnesses, they have not placed any material in support of the allegation. In our view, seriousness of the charge is, no doubt, one of the relevant considerations while considering bail applications but that is not the only test or the factor: the other factor that also requires to be taken note of is the punishment that could be imposed after trial and conviction, both under the Penal Code and the Prevention of Corruption Act. Otherwise, if the former is the only test, we would not be balancing the constitutional rights but rather “recalibrating the scales of justice.”

46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge-sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI.

[8] Mr. Choudhury, learned counsel for the petitioner has further referred to the decision rendered by the Hon’ble Supreme Court of India in the case of P. Chidambaram vs. Directorate of Enforcement, reported in (2020) 13 SCC 791 and particularly para 16 thereof. The said para is quoted below for convenience of consideration of the parameters laid down therein at a later stage of this order:-

16. Though we have heard the matter elaborately and also have narrated the contention of both sides in great detail including those which were urged on the merits of the matter we are conscious of the fact that in the instant appeal the consideration is limited to the aspect of regular bail sought by the appellant under Section 439 of the Cr.PC. While stating so, in order to put the matter in perspective it would be appropriate to take note of the observation made by us in the case of this very P. Chidambaram v. CBI, Criminal Appeal No. 1603 of 2019 which reads as hereunder:

21. The jurisdiction to grant bail has to be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail:

(i) the nature of accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution;

(ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses;

(iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence;

(iv) character, behaviour and standing of the accused and the circumstances which are peculiar to the accused;

(v) larger interest of the public or the State and similar other considerations.

22. There is no hard-and-fast rule regarding grant or refused to grant bail. Each case has to be considered on the facts and circumstances of each case and on its own merits. The discretion of the court has to be exercised judiciously and not in an arbitrary manner.”

[9] Against such submission of the learned counsel for the petitioner, Mr. Phukan, learned Public Prosecutor has submitted that the offences being an economic offence of huge magnitude, the Court may not like to show any leniency towards the petitioner. He has further submitted that there is no prayer made for compounding of the offences. The offences, involved in this case, are compoundable. On this point of argument, a pointed query is made to the learned counsel for the petitioner as to whether any prayer is pending for compounding of the offences to which he replied that the petitioner is likely to exercise his option only on release on bail.

[10] The learned Public Prosecutor has referred to the decision rendered by the Hon’ble Supreme Court of India in the case of Nimmagadda Prasad vs. Central Bureau of Investigation, reported in (2013) 7 SCC 466, and particularly paras 23, 24 and 25 thereof. The said paras are quoted herein below for convenience of consideration:

23. Unfortunately, in the last few years, the country has been seeing an alarming rise in white-collar crimes, which has affected the fibre of the country’s economic structure. Incontrovertibly, economic offences have serious repercussions on the development of the country as a whole. In State of Gujarat vs. Mohanlal Jitamalji Porwal and Anr. (1987) 2 SCC 364 this Court, while considering a request of the prosecution for adducing additional evidence, inter alia, observed as under:-

5… The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even-handed manner without fear of criticism from the quarters which view white-collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest.”

24. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the Legislature has used the words “reasonable grounds for believing” instead of “the evidence” which means the Court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.”

25. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.”

[11]   Mr. Phukan, learned Public Prosecutor, has also referred to the decision of the Hon’ble Supreme Court of India in the case of Y.S. Jagan Mohan Reddy vs. Central Bureau of Investigation, reported in (2013) 7 SCC 439 and particularly paras 34 and 35 thereof, which are quoted below:

“34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.”

’35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations.”

Since both the judgments, referred to by the learned Public Prosecutor, are authored by the same Hon’ble Judge of the Hon’ble Supreme Court of India and delivered on the same day, on the same nature of issue involved, this Court would like to refer one of these two judgments as that will cover the argument advanced by the learned Public Prosecutor.

[12] There is no dispute at the bar that final offence report has been laid in this case. There is also no dispute at the bar that the accused-petitioner has been in custody for 60 (sixty) days as on the date of argument and, therefore, 65 (sixty five) days as on the date of this order.

[13] The decisions rendered by the Hon’ble Supreme Court and referred to by the respective learned counsel for both the parties, on a cumulative reading, make it appear to this Court that the offence in the instant case being an economic offence should be looked into from a different perspective although at the same time Court should not lose sight of the fact in respect of the right of the petitioner to get bail and court has to balance between both these aspects. At the same time, in the light of the above judgments, rendered by the Hon’ble Supreme Court, this Court also needs to look into the severity of the punishment. This Court also cannot lose sight of the fact that the Investigating Agency has also completed the investigation and the offence report has already been laid in the court and that the presence of the petitioner, in custody, may not be necessary for further investigation.

[14] In the instant case, taking into account the alleged amount of evasion of tax, the case falls under Section 132(1)(i) of the AGST Act and the punishment prescribed for such an offence may extend to 5 (five) years and with fine.

[15] That apart, the offence report has already been laid in the instant case, and therefore, the undisputed position is that for the purpose of further investigation, custodial detention of the petitioner is not essential. As per the materials on record, there is no indication that the petitioner, if granted bail, is likely to evade the trial or there is an apprehension of his tampering with the witnesses. Apart from all these, this Court has also taken into fact that during the period of entire investigation, the petitioner has been in custody for 65 (sixty five) days.

[16] In view of the above, in the considered view of this Court, the petitioner deserves to be granted bail.

[17] Accordingly, the accused-petitioner, named above, shall be released on bail in connection with the abovementioned case on furnishing bail bond of Rs. 1,00,000/- (one lakh) with two suitable sureties of the like amount, to the satisfaction of the learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati.

The direction for bail is further subject to the conditions that the accused-petitioner:

(a) shall not leave the territorial jurisdiction of the learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati, without prior written permission from him; who, in the event of granting permission to leave the jurisdiction, shall pass a detailed reasoned order for his decision;

(b) shall deposit his Passport/visa, etc if any, in the court of the Chief Judicial Magistrate, Kamrup (Metro), Guwahati;

(c) shall not tamper with the evidence of the case;

(d) shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer; and

(e) shall not contact, in any form any of the witnesses of this case.

[18]  The learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati while releasing the petitioner on bail, shall be at liberty to put any other appropriate condition(s) in addition to the conditions above, imposed by this Court.

[19] The petition stands disposed of accordingly.

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