Heard Sri G.S. Chaturvedi, learned Senior Counsel assisted by Ms. Somya Chaturvedi and Mr. Somesh Khare, learned counsel for the applicant, Sri Dileep Chandra Mathur, learned counsel for the opposite parties – Union of India and Senior Intelligence Officer, DGGI, Gurgram Zonal Unit and perused the material available on record.

By way of the instant anticipatory bail application, prayer has been made for grant of anticipatory bail to the applicant in respect of Summons/Notice No. 4197, Dated 21.12.2020, under Section – 70 of Central Goods and Services Tax Act, 2017 issued by respondent no. 2, during the pendency of trial of the present case.

Prior notice of this bail application was served in the office of Government Advocate and as per Chapter XVIII, Rule 18 of the Allahabad High Court Rules, this anticipatory bail application is being heard. Grant of further time to the learned A.G.A as per Section 438 (3) Cr.P.C. (U.P. Amendment) is not required.

As per the pleadings made in the present anticipatory bail application, the applicant is under anticipation of his arrest in the investigation being conducted by the respondent no.2 in which summons / Notice No. CBIC-DIN- 202012DNN1000000DDCB dated 21.12.2020 has been issued, under Section – 70 of the Central Goods and Services Tax Act, 2017 by the Respondent No.2 (Annexure No.1) to this application.

It has been claimed on behalf of the applicant that the offence under which the applicant has been charged does not fall under Section – 438 (6) of Cr.P.C., 1973. As per the facts brought on record, the applicant happens to be Director of M/s Mahavir Transmission Ltd. (hereinafter referred to as the “Company”) and the aforesaid company is engaged in Manufacturing and Supply of Electrical Conductors, Aluminium Scrap and Aluminium Ingots and the same is running for the last 25 years. The company has gained a reputation in the said industry and was never indulged in any kind of breach towards any kind of Tax or other offences. Since promulgation of the C.G.S.T. Act, 2017, the applicant company has paid ₹ 85 crores G.S.T. in cash (exclusive of ITC Credit) and its customers are mainly Government Appointed Contractors such as L & T, Reliance Infra, Delhi Transco Limited, Tata Power Limited, Uttar Pradesh Power Corporation, Power Grid Corporation of India etc.

It has been claimed on behalf of the applicant that under paragraph nos.9, 10, 11 and 12 of the application, a brief sketch of working and payment of tax has been elaborated, which need not be referred here for the sake of unnecessary details. It has been claimed that on 17.01.2020, the respondent authorities conducted a search at the corporate office of the applicant located at C-58, Sector-4, NOIDA, Uttar Pradesh and the applicant was served summons for adducing his statement under Section – 70 of the C.G.S.T. Act, 2017 as he is solely handling the purchase for the applicant company to the exclusion of others. During search, the respondents authorities have taken certain documents at the corporate office of the company and the applicant has cooperated with the authorities in the procedure and voluntarily provided them with all the required documents for the purpose of investigation by the authorities on 17.01.2020, 03.02.2020 and 13.02.2020. It has been further claimed that in case interim protection is granted to the applicant, he is ready to co-operate with the ongoing investigation and will not abscond and he will appear as and when called upon by the investigating officer.

Submission on behalf of the applicant is that in this case, insofar as the applicant is concerned, he has been granted protection by a co-ordinate Bench of this Court on 28.01.2021, whereby it was made clear that the applicant will not be arrested but on condition that he will appear before the proper officer for investigation and in the meanwhile, both the sides were asked to exchange their pleadings. Pursuant thereto, both sides exchanged their pleadings and have been heard in detail. Now, insofar as issuance of summons/notice is concerned, which was issued for the first time on 21.12.2020, reply to this summons was given by the applicant producing relevant documents. Second summons was issued on 17.01.2021 to which reply was submitted the very same day and statement of the applicant was recorded on 17.01.2021. Both the sides have no objection to this process.

Now, it so happened that on account of behavior of the G.S.T. authorities/respondents, the applicant became apprehensive that he may be arrested, therefore he moved the present anticipatory bail application, wherein, interim protection was granted by the co-ordinate bench of this Court on 28.01.2021. Thereafter, several summons/notices were issued for investigation purpose, which were duly replied as per detailed descriptions contained under paragraph no.19 of the rejoinder affidavit filed on behalf of the applicant. Bare perusal of this paragraph, brings forth that statement of the applicant was recorded on 17.01.2020, 03.02.2021, 22.02.2021 and required documents were submitted to the respondent authorities on 17.01.2020, 03.02.2020, 13.02.2020, 28.12.2020 and at five instances thereafter.

In the backdrop of the aforesaid fact and circumstances of the case, the claim is that the respondent authorities in order to harass and intimidate the applicant are bent upon to ensure personal presence of the applicant before respondent no.2. The entire story of this case as reflected and brought before this Court is that applicant has cooperated to the fullest extent by submitting reply to the notice/summons issued to him. That being factual aspect and statement being recorded, there is no need of personal appearance because there is sanguine reason for the applicant to believe that respondent authorities are bent upon to ensure arrest of the applicant.

Further, learned counsel for the applicant has contended that insofar as the investigation part is concerned, till now no show cause notice was issued or served and has not been brought to the knowledge of the applicant, in case anything is required of the applicant, he will co-operate with the respondent-authorities to the fullest extent and he will supply material that is found to be relevant for the respondent authorities.

Lastly, learned counsel for the applicant has submitted that till show cause notice is issued, the amount of tax evaded cannot be determined/ascertained. That being position, how can it be said that any offence has been committed or not because the investigation is still incomplete.

While retorting to the aforesaid contention, submission of the learned counsel for the respondent-authorities is that insofar as anticipatory bail application of the applicant is concerned, it is not maintainable, for the reason that apprehension cannot be outcome of whims and fancy merely on account of fact that one is going to be arrested, therefore, anticipatory bail application is moved by him.

Learned counsel for the respondent-authorities has engaged attention of this Court to the statement of the applicant given to the extent that invoice of fake and forged firm was issued by him. This statement by virtue of application under Section – 136 of the C.G.S.T. Act, 2017 is admissible in evidence.

Learned counsel for the respondent-authorities has stressed on certain paragraphs of his counter affidavit and submitted that respondent-authorities have already assessed liability of tax to be paid by the applicant during investigation to the extent of ₹ 19.53 Crores in paragraph no.11 of the counter affidavit that forms part of the investigation.

Learned counsel for the respondent-authorities further has placed reliance in the case of Union of India versus Padam Narain Aggarwal Etc. reported in 2008 (13) SCC page no.305 and claimed that the order passed by the Bombay High Court in the aforesaid case was found to be blanket cover and, therefore, it was found to be not in consonance with law and that order was set aside. Now, insofar as the foundation of the anticipatory bail is concerned, there is nothing substantial which may justify apprehension of the imminent danger of being arrested in this case.

At this stage, learned counsel for the applicant intervened and replied to the aforesaid citation Union of India versus Padam Narain Aggarwal Etc., and claimed that insofar as the aspect of the application of Section – 438 in the matter of anticipatory bail is concerned, the same was never denied in such cases and the order of the Bombay High Court granting interim relief was made on condition when the respondent was not co-operating with the investigating authorities as mentioned in paragraph no.13 of the judgment. That being the case, the same is very much distinguishable from the case of the applicant, for the reason that the applicant has co-operated with the respondent-authorities submitting reply to the summons/notices. In support of the submission, learned counsel for the applicant has placed reliance on the decision of a co-ordinate bench of this Court in the case of Nitin Verma versus State of U.P. and Another reported in 2021 (86) GSTR page no.6, which is fully applicable in the present case and is helpful to the applicant.

Upon consideration of the facts and circumstances of the case, this Court could not come across any averment in the counter affidavit by the respondent no.2 to the impact that the applicant has not cooperated with the investigation that indirectly admits the situation that the applicant is cooperating with respondent no.2 and he has promised to continue to cooperate with the investigation, the applicant has no prior criminal antecedents brought on record. His implication can be made under cognizable and nonbailable offences u/s 132 (5) of the C.G.S.T. Act, if the allegations are found to be correct. As disclosed above, the personal liberty guaranteed under Article 21 of the Constitution of India is a fundamental right and in every case, arrest is not necessary. Under Section 438 Cr.P.C., where the implication of a person is for a non-bailable offence, he can apply for anticipatory bail. If the applicant cooperates with the inquiry, there is no requirement of his arrest. The applicant is having his own address of residence and business. He can give surety ensuring his appearance. He does not appear to be habitual offender, prosecuted or convicted earlier. Therefore, he deserves to be granted limited protection for the purpose of conclusion of inquiry by the Proper Officer.

In the event the applicant, Akshat Jain is arrested, he shall be enlarged on anticipatory bail till the inquiry is concluded by the Proper Officer under Section 70 (1) of the C.G.S.T. Act or assessment is made whichever is earlier, on execution of a personal bond of ₹ 5,00,000/- and two sureties of the like amount before the Proper Officer concerned on the following conditions :-

(i) The applicant shall make himself available for interrogation by the proper officer as and when required;

(ii) The applicant 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 from disclosing such facts to the Court or to any officer;

(iii) The applicant shall not leave India without the previous permission of the Court and if he has passport, the same shall be deposited by him before the proper officer concerned;

(iv) The party shall file computer generated copy of such order downloaded from the official website of High Court Allahabad;

(v) The concerned Authority/Official shall verify the authenticity of such computerized copy of the order from the official website of Allahabad High Court and shall make a declaration of such verification in writing.

(vi) In case the applicant fails to appear on any date fixed by the Proper Officer under the C.G.S.T. Act, for any reason whatsoever, this anticipatory bail application shall stand automatically rejected and the protection given to the applicant will cease to have any effect.

If any unforeseen circumstances arise, the Proper Officer would be at liberty to file appropriate application before this Court for cancellation of anticipatory bail granted to the applicant.

The Proper Officer will continue with the inquiry and will not be affected by any observation made in this order.

Consequently, the present anticipatory bail application is allowed.