Madras HC grants bail to Executive director related to non payment of GST
Fact and Issue of the case
The petitioner is an Executive Director of M/s.Saraswathi Udyog India Ltd., which company is engaged in the supply of White Duplex Board. The allegation against the company is that it was making outward supplies without paying the taxes that are due to the Government. It is the case of the prosecution that investigation revealed that supplies were made by the company, which were taxable to the extent of 7.75 Crores for the period from December, 2018 to October, 2019 and the bank statement of the company also showed that the company received payment from its customers to the tune of Rs.93,01,57,694/-, inclusive of taxes, but failed to remit the tax to the Government. Inspite of issue of summons, the petitioner did not respond, which resulted in the complaint being registered for an offence as stated above.
Observation of the Court
This Court gave its anxious consideration to the submissions advanced by the learned counsel appearing on either side and perused the materials available on record.
An undertaking affidavit has been filed by the petitioner dated 22.07.2021 in which the petitioner has submitted that the security given to the bank for the loans and LC availed to the tune of about Rs.75 Crores, security of property and machineries of the petitioner to the tune of about Rs.200 crores has been given and the petitioner has undertaken that the properties are put up for sale by the bank and after adjusting the amount that is due and payable to the bank on account of the loans and LCs availed by the petitioner, the surplus proceeds may be utilised for payment of the amount of GST calculated after taking into account the input tax credits or other refund calculation eligibility and based on the advice of the consultants, a charge be created on the subject properties in favour of the Revenue to the extent of the outstanding GST dues, which shall rank in priority after the settlement of debts due to the Bank. Learned Senior Central Government Standing Counsel appearing for the respondent has no serious objection for the same . In view of the fair stand taken by the learned counsel on either side, this Court is inclined to grant bail to the petitioner.
Accordingly, this criminal original petition is allowed on the following conditions :-
“i) The petitioner is ordered to be released on the basis of the bail bonds and sureties, which have been executed by the petitioner and the sureties while being enlarged on interim bail granted vide order dated 8.3.2021;
ii) The petitioner is directed to provide adequate immovable property as security towards the tax liability, due from the petitioner, without prejudice his rights and contentions;
iii) the petitioner shall appear before the respondent and produce the accounts and details of payment of input tax, if not already appeared;
iv) the petitioner shall not commit any offences of similar nature;
v) the petitioner shall not abscond either during investigation or trial;
vi) the petitioner shall not tamper with the evidence or witness or records either during investigation or trial;
vii) on breach of any of the aforesaid conditions, the learned Judicial Magistrate/trial court is entitled to take appropriate action against the petitioner in accordance with law as if the conditions have been imposed and the petitioner released on bail by the learned Magistrate/trial court himself as laid down by the Hon’ble Supreme Court in P.K.Shaji – Vs – State of Kerala (2005 AIR SCW 5560);
viii) if the accused thereafter absconds, a fresh FIR can be registered u/s 229-A IPC.
ix) The undertaking of the petitioner dated 22.7.2021 shall form part of the records.”
The court ruled in favour of the petitioner and disposed off the petition
Read the full order from belowMadras-HC-grants-bail-to-Executive-director-related-to-non-payment-of-GST