Gujarat High Court
Virbhadrasinh Pratapsinh Chauhan ... vs State Of Gujarat on 25 October, 2024
NEUTRAL CITATION
R/CR.MA/20070/2024 ORDER DATED: 25/10/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR REGULAR BAIL - AFTER CHARGESHEET)
NO. 20070 of 2024
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VIRBHADRASINH PRATAPSINH CHAUHAN DIRECTOR OF XERXES HR SERVICES
PVT. LTD.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR. APURVA N MEHTA(7202) for the Applicant(s) No. 1
NIDHI T VYAS(7772) for the Respondent(s) No. 2
MR RONAK RAVAL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
Date : 25/10/2024
ORAL ORDER
1. RULE. Learned APP waives service of rule for the respondent-State.
2. The present application is filed under Section 483 of the Bharatiya Nyaya Suraksha Sanhita, 2023 (for short "BNSS") for regular bail in connection with FIR being F. No. GEXCOM/SAI/ MISC/199/2022-SI registered at Superintendent (AE) Central GST, Gandhinagar for the offences punishable under Sections 132(1)(d), etc. of the Central Goods and Services Tax Act, 2017.
3. Learned Advocate appearing on behalf of the applicant submits that the applicant has nothing to do with the offence and he is falsely implicated in the offence. The applicant is in jail since 04.07.2024. It is submitted that nothing is required to be recovered or discovered from the applicant and the alleged offence is punishable upto five years only. The applicant, a Director of Xerxes HR Services Pvt. Ltd., oversees a company that provides manpower supply services to various State Government departments such as GPCB, Jilla Panchayats, the Page 1 of 7 Uploaded by ALI ISTAYAK(HC01093) on Fri Oct 25 2024 Downloaded on : Fri Nov 22 21:27:23 IST 2024 NEUTRAL CITATION R/CR.MA/20070/2024 ORDER DATED: 25/10/2024 undefined Collector Office Aravalli, and the District Education Office. The company is registered under the CGST Act. On 16.03.2022, the Anti-Evasion Wing of Central GST & Central Excise, Gandhinagar, conducted a search of the company's registered premises, where the applicant fully cooperated, providing all requested information. The search concluded at 11:15 PM, resulting in the seizure of documentary and electronic evidence. An Order of Seizure in Form GST INS-02 was issued, and there is no pending recovery against the applicant. The applicant was subsequently summoned multiple times, with statements recorded on 16.03.2022, 27.02.2024, 21.03.2024, 21.06.2024, and 04.07.2024 under Sec. 70 of the CGST Act. The applicant asserts that under duress, they were forced to confess that Xerxes HR Services Pvt. Ltd. collected tax from service recipients but failed to remit it to the government. The applicant claims statements were signed under coercion without a review, and no examination of the seized materials was conducted by the respondent, who based allegations solely on this forced confession. Even during the pendency of the application, the applicant disputed the said demand raised by the authority of Rs.8.60 crore. The applicant has already depsoited 60 lakh rupees before the authority. The applicant has produced an undertaking stating the he is ready and willing to pay 10% of the amount. It is further submitted that, considering the nature of the offence, the applicant may be granted regular bail with the imposition of suitable conditions.
4. Learned APP appearing on behalf of the respondent-State has opposed grant of regular bail looking to the nature and Page 2 of 7 Uploaded by ALI ISTAYAK(HC01093) on Fri Oct 25 2024 Downloaded on : Fri Nov 22 21:27:23 IST 2024 NEUTRAL CITATION R/CR.MA/20070/2024 ORDER DATED: 25/10/2024 undefined gravity of the offence. Therefore, the present application may be dismissed.
5. Learned advocate appearing for the respondent No.2 has vehemently opposed the present application stating that the applicant, as Director of Xerxes HR Services Pvt. Ltd., oversees the company's operations, and that investigations revealed the company collected approximately Rs. 8.90 Crores in taxes from government clients without remitting it to the government. This is evidenced by the company's bank accounts and confirmations from government departments confirming GST payments into its ICICI and ADC Bank accounts against taxable invoices issued by the company. By collecting but not remitting taxes, and by falsifying financial records, the applicant has committed offence. The applicant has only deposited Rs. 61.86 Lakhs against this liability during the investigation. Furthermore, the applicant provided false information and documents to mislead the investigation, concealed true facts, and failed to disclose the ADC Bank account, with falsified audit reports reflecting reduced turnover in its Profit & Loss statement. Out of the Rs. 8.90 Crores tax liability, only Rs. 61.86 Lakhs has been paid over two years. The applicant's actions, contravening GST provisions and misleading the investigation, resulted in a substantial loss of Rs. 8.90 Crores to the government. Therefore, She has requested that the bail application be rejected.
6. While granting bail, the Court has to consider the involvement of the accused in the alleged offence, the jurisdiction Page 3 of 7 Uploaded by ALI ISTAYAK(HC01093) on Fri Oct 25 2024 Downloaded on : Fri Nov 22 21:27:23 IST 2024 NEUTRAL CITATION R/CR.MA/20070/2024 ORDER DATED: 25/10/2024 undefined 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 and 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 and the nature of the materials relied upon by the prosecution; (ii) reasonable apprehension of tampering with the witnesses and 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 are required to be considered.
7. I have heard the learned advocates appearing on behalf of the respective parties and perused the investigation papers. Following aspects have been considered:
(1) Investigation is over;
(2) The offence is punishable by a maximum of five years and
the offence is not punishable by life imprisonment or death penalty and no chance of flight risk. (3) The allegations against the applicant are that he caused a loss of Rs. 8.90 crore, an amount collected as GST from various firms, which he did not deposit with the Government. The procedure for the recovery of such tax is governed by the provisions of the Central Goods and Services Tax Act, 2017, Chapter XV. Section 76 specifies that if tax is collected but not paid to the Government, Page 4 of 7 Uploaded by ALI ISTAYAK(HC01093) on Fri Oct 25 2024 Downloaded on : Fri Nov 22 21:27:23 IST 2024 NEUTRAL CITATION R/CR.MA/20070/2024 ORDER DATED: 25/10/2024 undefined then the Act itself prescribes the procedure and mode for initiating recovery proceedings. The applicant has already depsoited 60 Lakh Rupees before the authority. The applicant has expressed his willingness to deposit 10% of the alleged amount. In this regard, an undertaking has been filed on his behalf stating that the applicant is ready to deposit Rs. 90,00,000/- (Ninety Lakh Rupees) within a period of seven days.
(4) Now, nothing required to discover or recover from the accused and there is no possibility of the trial taking place in the near future.
8. This Court has also taken into consideration the law laid down by the Hon'ble Apex Court in the case of Sanjay Chandra vs. Central Bureau of Investigation reported in [2012]1 SCC 40 as well as in the case of Gudikanti Narasimhulu And Ors vs. Public Prosecutor, High Court of Andhra Pradesh reported in (1978)1 SCC 240. Obviously, the conclusion of trial will take time and keeping the accused behind the bars is nothing but amounts to pre-trial conviction and therefore, considering the celebrated principle of bail jurisprudence is that "bail is a rule and jail is exception" as well as the concept of personal liberty guaranteed under Article 21 of the Constitution of India, present application deserves consideration .
9. In the facts and circumstances of the case and considering the nature of the allegations made against the applicant/s in the FIR, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the Page 5 of 7 Uploaded by ALI ISTAYAK(HC01093) on Fri Oct 25 2024 Downloaded on : Fri Nov 22 21:27:23 IST 2024 NEUTRAL CITATION R/CR.MA/20070/2024 ORDER DATED: 25/10/2024 undefined discretion and enlarge the applicant/s on regular bail. Hence, the present application is allowed. The applicant/s is/are ordered to be released on regular bail in connection with FIR being F. No. GEXCOM/SAI/MISC/199/2022-SI registered at Superintendent (AE) Central GST, Gandhinagaron executing a personal bond of Rs.25,000/- (Rupees Twenty-five Thousand only) with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions that he shall;
(a) not take undue advantage of liberty or misuse liberty;
(b) not act in a manner injurious to the interest of the prosecution & shall not obstruct or hamper the police investigation and shall not to play mischief with the evidence collected or yet to be collected by the police;
(c) surrender passport, if any, to the Trial Court within a week;
(d) not leave the State of Gujarat without prior permission of the Trial Court concerned;
(e) mark presence before the concerned Police Station once in a month for a period of six months between 11.00 a.m. and 2.00 p.m.;
(f) furnish the UIDAI Number, Contact Number/s, Passport Number (if he is having the passport), E-mail address and present address of his residence to the Investigating Officer and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of Trial Court;
(g) not indulge in any illegal activity or any similar type of offence. If the applicant is found in any illegal activity or any similar type of activity, then, concerned Page 6 of 7 Uploaded by ALI ISTAYAK(HC01093) on Fri Oct 25 2024 Downloaded on : Fri Nov 22 21:27:23 IST 2024 NEUTRAL CITATION R/CR.MA/20070/2024 ORDER DATED: 25/10/2024 undefined Investigating Officer shall have liberty to file an application for cancellation of bail against the present applicant.
In case of breach of any conditions, the concerned Trial Court shall have liberty to cancel the bail of the present applicant;
(h) The applicant shall deposit Rs. 90,00,000/- (Ninety Lakh Rupees) within a period of seven days from the date of applicant's release.
10. The authorities will release the applicant/s only if he is not required in connection with any other offence for the time being. If breach of any of the above conditions is committed, the Sessions Judge concerned will be free to issue warrant or take appropriate action in the matter.
11. Bail bond to be executed before the lower Court having jurisdiction to try the case. It will be open for the concerned Court to delete, modify and/or relax any of the above conditions, in accordance with law.
12 At the trial, the trial Court shall not be influenced by the observations of preliminary nature qua the evidence at this stage made by this Court while enlarging the applicant/ on bail.
13. Rule is made absolute to the aforesaid extent. Direct service is permitted.
(HASMUKH D. SUTHAR,J) ALI Page 7 of 7 Uploaded by ALI ISTAYAK(HC01093) on Fri Oct 25 2024 Downloaded on : Fri Nov 22 21:27:23 IST 2024