GST Update on imposition of onerous bail conditions leads to depriving accused with liberty 137/2020-21

It is a settled rule of law that person is to be presumed as innocent till he is found guilty and so the punishment cannot be given to the accused without proper trial. Recently, before the Punjab & Haryana High Court in the case of RANJIT SINGH VERSUS STATE OF HARYANA [CRM-M-14856-2020], it was pronounced that imposition of onerous and stringent conditions of bail tantamount to denial of bail which is not justifiable. The decision rendered by the High Court is the subject matter of discussion of the present update.

The allegation against the petitioner was that he was involved in issuance of fake invoices in GST by creating 18 fake firms and since the GST liability was beyond Rs. 5 Crores, the offence was cognizable and non-bailable under section 132 of the CGST Act, 2017. Consequently, the Additional Sessions Judge, Panipat, had allowed the bail application of the petitioner subject to payment of outstanding liability of Rs. 1,94,78,017/- along with interest and furnishing of bail bonds to the extent of Rs. 50 Lakhs with one surety of like amount. It was contended by the petitioner that imposition of such conditions for bail resulted in practically denying the bail to the petitioner as he is not in position to pay the outstanding amount and so it is in violation of Article 21 of the Constitution of India as the liberty of the petitioner is being deprived.

The Hon’ble High Court concurred that it is a settled principle that bail is the rule and jail is the exception and mere seriousness of the charge is not a factor to be taken into account while denying the valuable right of liberty. The basic principle being the man is innocent till he is found guilty. It was held that the investigation and enquiry was complete and relevant documents were already in possession of the prosecution so the petitioner cannot be detained during trial only on account of the fact that a bail order in the form of recovery proceedings has been passed against him to pay the outstanding amount worth almost Rs. 2 Crores along with interest. The hon’ble High Court relied on the Apex Court decision given in the case of SANJAY CHANDRA VS CBI [2012 (1) SCC 40] wherein it was held that object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative and bail should be granted as far as the court has confidence that the accused will not betray the trust by absconding. The stringent conditions on bail are to be imposed only where it is threat that the accused would tamper with evidences or witnesses which is not the case. The discretion of granting bail affects the valuable right of liberty of person so great care and caution is to be exercised. Moreover, the hon’ble High Court stated that since the outstanding amount of Rs. 1,94,78,017/- has been confirmed against the petitioner, it makes the offence bailable under section 69(3) and section 132(4) of the CGST Act, 2017.

Hence, the hon’ble High Court held the conditions of bail as unreasonable and set aside the condition of payment of outstanding amount of Rs. 1,94,78,017/- along with interest. The bail bonds of Rs. 50 Lakhs with one surety were reduced to Rs. 25 Lakhs which shall be in the form of immovable property.

The cases of fake invoices reported in GST have increased manifold which have lead to increased arrests in GST. However, it is high time that the authorities realise the significance of Article 21 of the Constitution of India so as to ensure that the valuable right of the liberty of the accused is not being deprived. Although there are significant judicial guidelines against arbitrary exercise of discretionary powers but it is observed that rarely the guidelines are being followed. We expect that the administration will be diligent in ensuring that the powers are not abused.

This is solely for educational purpose.
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GST Update on imposition of onerous bail conditions leads to depriving accused with liberty 137/2020-21

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