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February 8, 2022

SC: In GST Evasion Case Accused cannot be Detained in Custody Indefinitely

by Mahesh Mara in GST, Legal Court Judgement

SC: In GST Evasion Case Accused cannot be Detained in Custody Indefinitely

Fact and Issue of the case

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. The Petitioner has filed an appeal to grant him bail where the investigation has not been completed yet?

Observation of the Tribunal

Learned counsel for the appellant has laid lot of emphasis on the fact that the proceedings arising from evasion of GST were preceded by a search operation where the officers concerned occupied a house for more than a week with lady members there which has been adversely commented upon by the High Court and its judgment dated 24.12.2019. He submits that in the special leave petition filed by the State while issuing notice on 16.7.2021, this Court has specifically observed that without condoning the conduct of the officers notice was issued because by the judgment in question the statutory protection has
been waived without hearing the officers concerned.

Further submissions of learned for the appellant is that he has been in custody for 25 months out of a total period of 5 years for which he can be sentenced. The investigation is still stated to be pending though complaint has been filed. He states that the endeavor of the officers is only to teach him a lesson for having initiated proceeding which resulted in adverse orders against them. He has also drawn our attention to the counter affidavit filed by the State where the allegation against him is that he played an important role in execution of the scam and that confidential investigation is still under way in order to identify these persons and the role played in the execution of the scam.

On the other hand, learned ASG strongly defends the order and states that the appellant should not be
enlarged on bail as he is a habitual offender who has earlier also been engaged in violation of the law as per earlier provisions. His submission is that a number of accused are absconding and only on their being in taken into custody would the root of the problem be detected where the evasion of duty is to the extent of 64 crores. On conspectus of the aforesaid matter, we are of the view that the appellant cannot be indefinitely detained in custody more so having already undergone a period of 25 months of custody when he can be sent behind bars for maximum five years. It is almost 50% of the sentence. Complaint has been filed. In view of the aforesaid facts and circumstances, we are inclined to grant bail to the appellant on terms and conditions to the satisfaction of the Trial Court.

Conclusion

The court has dismissed the appeal and ruled in favour of the petitioner and granted the bail

Read the full order from below

SC-In-GST-Evasion-Case-Accused-cannot-be-Detained-in-Custody-Indefinitely

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