1. Second supplementary affidavit dated 22.02.2021 filed on behalf of the applicant and supplementary counter affidavit dated 22.02.2021 filed on behalf of opposite party No. 2, are taken on record.

2. Heard Mr. Anurag Khanna, learned Senior Advocate assisted by Mr. Raghav Dev Garg, learned counsel for the applicant, Mr. Rabindra Singh, learned Additional Government Advocate for the State/opposite party No.1 and Mr. D.C. Mathur, learned counsel appearing on behalf of opposite party No.2, Directorate General of G.S.T. Intelligence, Kaushambi, Ghaziabad.

3. This application under section 439 (1)(b) of Code of Criminal Procedure has been filed by the applicant to set aside the condition No. 4 of the bail order dated 24.11.2020 passed by the Special Chief Judicial Magistrate, Meerut, whereby following conditions have been imposed upon the applicant while granting bail to him.

4. The brief facts of the case, which are relevant for the purpose of deciding this case, as submitted by the learned counsel for the applicant, are that the applicant is the sole proprietor of firm registered in the name and style of M/s LAN Engineering and Technologies. The firm is involved in the business of manufacturing and supply of meter boxes and distribution boxes to Government utilities. The applicant is also taking care of another firm namely, M/s Neelu Packing Industries, of which Mr. Balbir Singh, who is the father of the applicant, is the sole proprietor. On 06.08.2020, a joint team of officers of Department of C.G.S.T. Commissionerate, NOIDA and C.G.S.T. Commissionerate, Meerut, visited the premises of M/s LAN Engineering and Technologies and M/s Neelu Packing Industries. Thereafter, on 11.11.2020 summons under section 70 of Central Goods and Services Tax Act, 2017 (herein-after referred to as “C.G.S.T Act”) was served upon the applicant requiring his presence on 11.11.2020 at 14:00 hours before Senior Intelligence Officer, DGGI, Ghaziabad. The applicant appeared before the Authorities concerned on behalf of both the aforesaid firms and his statement under section 70 of C.G.S.T. Act was recorded on 11.11.2020. Main allegation against the applicant is that the four firms, namely, M/s Jain Polymer, M/s Keval Polymer, M/s Balaji Trading Company and M/s Sai Nath Plastics, which are supplier’s firms of plastic scrap for both the aforesaid firms of the applicant, are not found in existence as per information of the Department. M/s LAN Engineering and Technologies and M/s Neelu Packing Industries have fraudulently availed input tax credit approximately, a sum of ₹ 9,51,00,000/- (Rupees nine crores fifty one lac only), out of which rupees six crore sixty lac for M/s Neelu Packing Industries and rupees two crore ninety one lac for M/s LAN Engineering and Technologies. After recording the statement of the applicant under section 70 of C.G.S.T. Act, he was arrested on 12.11.2020 in accordance with the provisions of section 69 of C.G.S.T. Act, as the response of the applicant was not found satisfactory, and he was sent in judicial custody for the offence under section 132 (1)(c) and 132(1)((i) of the C.G.S.T. Act, 2017, and thereafter he was granted bail vide order dated 24.11.2020 passed by Special Chief Judicial Magistrate, Meerut, subject to above-mentioned conditions.

5. Main substratum of argument of Mr. Anurag Khanna, learned Senior Advocate appearing on behalf of the applicant is that out of disputed amount of ₹ 9,51,00,000/- (Rupees nine crore fifty one lac only), the applicant has already deposited a sum of ₹ 5,00,00,000/- (rupees five crore only) under duress and coercion on 21.11.2020 on account of putting extreme pressure upon the applicant by the Department. It is vehemently urged by the learned counsel for the applicant that till date neither any criminal complaint has been filed nor any proceedings under section 73 or 74 of the C.G.S.T. Act, has been initiated against the applicant by the Department and enquiry proceedings is still under process. It is also submitted by the learned counsel for the applicant that since the determination of input tax credit wrongly availed has not been finally made by the Department and no order under section 83 of C.G.S.T. Act, 2017 for provisional attachment of any property including bank account belonging to the applicant has been made, therefore, the applicant cannot be directed and forced to deposit the remaining disputed amount of ₹ 4,51,00,000/- (rupees four crore fifty one lac only). It is next submitted by the learned counsel for the applicant that under the C.G.S.T. Act, there is no statutory provision for compelling the applicant to deposit the entire amount without completing the investigation/enquiry or without launching prosecution by filing complaint or without initiating any recovery proceedings under section 73 or 74 of C.G.S.T. Act. Much emphasis has been given that under Chapter XV, there is a complete procedure for demand and recovery, therefore, without following the same, the applicant cannot be compelled to deposit the entire disputed amount. It is submitted that any act done by the Department otherwise in due course of law as provided under C.G.S.T. Act, can be termed as illegal action. It is also pointed out by the learned counsel for the applicant that vide two letters dated 23.11.2020 addressed to Senior Intelligence Office, Group D, DGGI, Ghaziabad, Regional Unit, undertakings were given by the applicant with regard to disputed amount against the aforesaid firms of the applicant, by submitting that he has voluntarily deposited a sum of ₹ 1,50,00,000/- (Rupees one crore fifty lac only) on 21.11.2020 with regard to liability against M/s LAN Engineering and Technologies, NOIDA and ₹ 3,50,00,000/- (rupees three crore fifty lac only) on 21.11.2020 with regard to liability against M/s Neelu Packing Industries, against reversal of disputed ITC of IGST availed by him during the period April, 2018 to March, 2019 on the strength of supply made by M/s Jain Polymer, M/s Keval Polymer, M/s Balaji Trading Company and M/s Sai Nath Plastics, and assured that rest of the disputed ITC of IGST will be deposited within six months and he will fully cooperate with the investigation, copies of undertaking along with copies of Chalan have been brought on record as annexure-8 to the bail application. It is also pointed out by the learned counsel for the applicant that the applicant, after granting bail on 24.11.2020, has also given an undertaking on the same day, i.e. 24.11.2020 in terms of conditions imposed upon him in the bail order dated 24.11.2020.

6. Here, it is also relevant to mention the contents of paragraph 2 of the second supplementary affidavit filed today on behalf of the applicant, which are reproduced here-in below:

“That the applicant submits that if the Hon’ble Court is pleased to modify the condition No 4 in the order dated 24.11.2020 passed by the Chief Judicial Magistrate to the extent that instead of depositing ₹ 4.5 crores (remaining amount of disputed ITC availed) in cash, the applicant be directed to deposit any security, other than cash or bank guarantee, the applicant undertakes that he shall adhere to the same and shall submit as security, the property papers of the land being lease hold property No. “100” with an area admeasuring 496 Sq. Mtr., situated at Block “C”, Sector 50, NOIDA, Gautam Buddh Nagar. The property is in the name of the applicant’s father and as per the latest available valuation, the same is worth approximately ₹ 5,60,20,000/-, which is more than ₹ 4.5 Crores. The applicant further submits that the aforementioned land is free from all encumbrances.”

7. On the strength of aforesaid facts, it is submitted by the learned counsel for the applicant that condition No. 4 of the bail order dated 24.11.2020 is onerous and unreasonable under the facts of this case. Object of imposing conditions is to secure the attendance of the accused and to protect the interest of revenue, instead ruins the business of accused, therefore he can be directed to give security other than cash or bank guarantee as per his undertaking, as mentioned in paragraph 2 of the second supplementary affidavit dated 22.02.2021.

8. In support of aforesaid contentions, learned counsel for the applicant has placed reliance upon the following judgments of the Supreme Court:

1. Sandeep Jain v. National Capital Territory of Delhi, 2000 (2) SCC 66,

2. Amarjit Singh v. State of NCT of Delhi, JT 2002 (1) SC 291,

3. Sheikh Ayub vs State of M.P., 2004 (13) SCC 457

4. Ramathal & others vs Inspector of Police & Another, 2009 Cr.L.J. 2271,

5. Munish Bhasin & Others vs State (Govt. of N.C.T. of Delhi) & Another, 2009 (4) SCC 45,

6. Sumit Mehta vs State (N.C.T. of Delhi), 2013 (15) SCC 570,

7. Dilip Singh vs State of M.P. and another, Criminal Appeal No. 53 of 2021 decided on 19.01.2021.

9. In the case of Sandeep Jain (supra) the Apex Court held that:

“We are unable to appreciate even the first order passed by the Metropolitan Magistrate imposing the onerous condition that an accused at the FIR stage should pay a huge sum of ₹ 2 lakhs to be set at liberty. If he had paid it is a different matter. But the fact that he was not able to pay that amount and in default thereof he is to languish in jail for more than 10 months now, is sufficient indication that he was unable to make up the amount. Can he be detained in custody endlessly for his inability to pay the amount in the range of ₹ 2 lakhs. If the cheques issued by his surety were dishonoured, the Court could perhaps have taken it as a ground to suggest to the payee of the cheques to resort to his legal remedies provided by law. Similarly if the court was dissatisfied with the conduct of the surety as for his failure to raise funds for honouring the cheques issued by him, the court could have directed the appellant to substitute him with another surety. But to keep him in prison for such a long period, that too in a case where bail would normally be granted for the offences alleged, is not only hard but improper. It must be remembered that the Court has not even come to the conclusion that the allegations made in the FIR are true. That can be decided only when the trial concludes, if the case is charge-sheeted by the police”.

10. The Apex Court in Amarjit Singh (supra) , held as under:-

“4. Having regard to the facts and circumstances of the present case, we have no hesitation in coming to the conclusion that the imposition of condition to deposit the sum of ₹ 15 lacks in the form of FDR in the Trial Court is an unreasonable condition and, therefore, we set aside the said condition as a condition precedent for granting anticipatory bail to the accused/appellant…….”

11. In the case of Sheikh Ayub (supra), facts of the case before the Apex Court were that by the impugned order the appellant was granted bail and directed to deposit ₹ 2,50,000/- which is alleged to be the amount misappropriated by the appellant. There was also condition for furnishing surety bond for ₹ 50,000/-. In the circumstances of the case, Apex Court held that direction to deposit ₹ 2,50,000 was not warranted, as part of the conditions for granting bail and observed that the direction to deposit ₹ 2,50,000/- is deleted and subject to this modification the order passed by the learned Single Judge granting bail is confirmed.

12. In Ramathal & Ors (supra), the Apex Court has again considered the issue of imposing onerous conditions while granting Anticipatory bail to accused. Relevant observations made by the Apex Court in the said case are as follows:

“7. On perusal of the submissions made and material on record, the High Court passed an order granting anticipatory bail as prayed for on condition that in the event of arrest, the appellants shall be enlarged on bail on their depositing ₹ 32,00,000/- to the credit of Crime No. 56 of 2008 before the Judicial Magistrate No. 1, Coimbatore and also on their executing a personal bond of ₹ 1,00,000/- with two sureties each for the like sum to his satisfaction.

8. Aggrieved by the aforesaid order, the appellants approached this Court on the ground that the conditions imposed by the High Court while granting anticipatory bail are not only unreasonable and onerous but the same also amounts to putting a fetter on the right of appellants being admitted to bail, in terms of the order passed.

15. It appears that in the aforesaid facts and circumstances, the High Court passed the impugned order with the intention of protecting the interest of the complainant in the matter. In our considered opinion, the approach of the High Court was incorrect as under the impugned order a very unreasonable and onerous condition has been laid down by the Court as a condition precedent for grant of anticipatory bail.”

13. In the case of Munish Bhasin (supra), the Apex Court has held that:

“10. It is well settled that while exercising discretion to release an accused under Section 438 of the Code neither the High Court nor the Sessions Court would be justified in imposing freakish conditions. There is no manner of doubt that the court having regard to the facts and circumstances of the case can impose necessary, just and efficacious conditions while enlarging an accused on bail under Section 438 of the Code. However, the accused cannot be subjected to any irrelevant condition at all.

11. The conditions which can be imposed by the court while granting anticipatory bail are enumerated in subsection (2) of Section 438 and sub-section (3) of Section 437 of the Code. Normally, conditions can be imposed (i) to secure the presence of the accused before the investigating officer or before the Court, (ii) to prevent him from fleeing the course of justice, (iii) to prevent him from tampering with the evidence or to prevent him from inducing or intimidating the witnesses so as to dissuade them from disclosing the facts before the police or court, or (iv) restricting the movements of the accused in a particular area or locality or to maintain law and order etc. To subject an accused to any other condition would be beyond jurisdiction of the power conferred on court under Section 438 of the Code.

12. While imposing conditions on an accused who approaches the court under Section 438 of the Code, the court should be extremely chary in imposing conditions and should not transgress its jurisdiction or power by imposing the conditions which are not called for at all.

There is no manner of doubt that the conditions to be imposed under Section 438 of the Code cannot be harsh, onerous or excessive so as to frustrate the very object of grant of anticipatory bail under Section 438 of the Code.

13. In the instant case, the question before the Court was whether having regard to the averments made by Ms. Renuka in her complaint, the appellant and his parents were entitled to bail under Section 438 of the Code. When the High Court had found that a case for grant of bail under Section 438 was made out, it was not open to the Court to direct the appellant to pay ₹ 3,00,000/- for past maintenance and a sum of ₹ 12,500 per month as future maintenance to his wife and child.

In a proceeding under Section 438 of the Code, the Court would not be justified in awarding maintenance to the wife and child.”

14. In the case of Sumit Mehta (supra), the only point for consideration was whether the condition of depositing an amount of ₹ 1,00,00,000/- in fixed deposit for anticipatory bail is sustainable in law and whether such condition is outside the purview of Section 438 of the Code?

The observations made by the Apex Court while deciding the aforesaid issue are as under:

11. While exercising power under Section 438 of the Code, the court is duty-bound to strike a balance between the individual’s right to personal freedom and the right of investigation of the police. For the same, while granting relief under Section 438(1), appropriate conditions can be imposed under Section 438(2) so as to ensure an uninterrupted investigation. The object of putting such conditions should be to avoid the possibility of the person hampering the investigation.

Thus, any condition, which has no reference to the fairness or propriety of the investigation or trial, cannot be countenanced as permissible under the law. So, the discretion of the court while imposing conditions must be exercised with utmost restraint.

12. The law presumes an accused to be innocent till his guilt is proved. As a presumably innocent person, he is entitled to all the fundamental rights including the right to liberty guaranteed under Article 21 of the Constitution.

13. We also clarify that while granting anticipatory bail, the courts are expected to consider and keep in mind the nature and gravity of accusation, antecedents of the applicant, namely, about his previous involvement in such offence and the possibility of the applicant to flee from justice. It is also the duty of the court to ascertain whether accusation has been made with the object of injuring or humiliating him by having him so arrested.

It is needless to mention that the courts are duty-bound to impose appropriate conditions as provided under subsection (2) of Section 438 of the Code.

14. Thus, in the case on hand, fixed deposit of ₹ 1,00,00,000 for a period of six months in the name of the complainant and to keep the FDR with the investigating officer as a condition precedent for grant of anticipatory bail is evidently onerous and unreasonable. It must be remembered that the Court has not even come to the conclusion whether the allegations made are true or not which can only be ascertained after completion of trial. Certainly, in no words are we suggesting that the power to impose a condition of this nature is totally excluded, even in cases of cheating, electricity pilferage, white-collar crimes or chit fund scams etc.

15. The words “any condition” used in the provision should not be regarded as conferring absolute power on a court of law to impose any condition that it chooses to impose. Any condition has to be interpreted as a reasonable condition acceptable in the facts permissible in the circumstance and effective in the pragmatic sense and should not defeat the order of grant of bail. We are of the view that the present facts and circumstances of the case do not warrant such extreme condition to be imposed.

15. Quite recent the Apex Court on January 19, 2020 has again considered the issue of imposing onerous conditions while granting Anticipatory bail to accused in case of Dilip Singh v. State of Madhya Pradesh and Another in Criminal Appeal No.53 of 2021.

Facts , observations and findings of the Apex Court are as follow :

“2. This appeal is against an order dated 11 September 2019 passed by the High Court granting anticipatory bail to the appellant, subject to the condition of deposit of ₹ 41 lakhs in court and upon his furnishing personal bond in the sum of ₹ 50,000 with one solvent surety in the like amount to the satisfaction of the arresting officer. It was directed that the order would be governed by condition Nos 1 to 3 of sub-Section 2 of Section 438 of the Code of Criminal Procedure. The trial court was directed to deposit the amount so deposited by the appellant with any nationalized bank.

3. Ex facie, the disputes in the instant case are civil in nature. It is the contention of the complainant that despite having paid ₹ 41 lakhs to the appellant pursuant to an agreement for purchase of agricultural land, the appellant has not executed the deed of sale in respect of the same. It appears that the complainant has also filed a civil suit for specific performance of the said agreement, which is pending adjudication.

4. By imposing the condition of deposit of ₹ 41 lakhs, the High Court has, in an application for pre-arrest bail under Section 438 of the Criminal Procedure Code, virtually issued directions in the nature of recovery in a civil suit.

5. It is well settled by a plethora of decisions of this Court that criminal proceedings are not for realization of disputed dues. It is open to a Court to grant or refuse the prayer for anticipatory bail, depending on the facts and circumstances of the particular case. The factors to be taken into consideration, while considering an application for bail are the nature of accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution; reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; character behaviour and standing of the accused; and the circumstances which are peculiar or the accused and larger interest of the public or the State and similar other considerations. A criminal court, exercising jurisdiction to grant bail/anticipatory bail, is not expected to act as a recovery agent to realise the dues of the complainant, and that too, without any trial.

6. We accordingly modify the order impugned before us by deleting the direction to deposit ₹ 41 lakhs as directed by the High Court. Needless to mention, the grant of anticipatory bail shall be governed by the conditions in Section 438(2) of the Code of Criminal Procedure. ”

16. Per contra, Mr. Rabindra Singh, learned Additional Government Advocate for the State of U.P./opposite party No.1 and Mr. D.C. Mathur, learned counsel appearing for opposite party No. 2 submit that since, the applicant has already given undertaking on 23.11.2020 before the Senior Intelligence Office, Group-D, DGGI, Ghaziabad, Regional Unit, therefore, he cannot deviate from his undertaking and as such, condition No. 4 as imposed in the bail order dated 24.11.2020 passed by Special Chief Judicial Magistrate, Meerut, is not liable to be interfered with, but they do not dispute the aforesaid factual aspect of the matter as argued by learned counsel for the applicant. In paragraph 21 of the counter affidavit of opposite party No. 2, it is stated that proceedings for demand and recovery of disputed ITC availed by M/s NPI and M/s LE & T under section 73 and 74 of the C.G.S.T. Act, 2017 is the action after completion of the investigation, which is under progress. It is also submitted that applicant voluntarily deposited tax amount of ₹ 5,00,00,000/- (rupees five crore only) under section 74(5) of the C.G.S.T. Act.

17. Mr. D.C. Mathur, learned counsel for opposite party No. 2 has placed reliance upon the following judgments:

1. Suresh Kumar P.P. & another vs The Deputy Director, Directorate General of GST Intelligence (DGGI) & others (Petition for Special Leave to Appeal (C) No. 13128 of 2020 decided on 07.01.2021.

2. Vikalp Jain vs Union of India and others, (Matter under Article 227 No. 5789 of 2019) decided on 02.08.2019.

18. In the case of Suresh Kumar (supra), the petitioner prayed for setting aside the impugned notice, invalidation of search and seizure proceedings, refund or amount collected under duress and also challenged the simultaneous proceedings of investigation under section 67 of the C.G.S.T. Act having been commenced when already an audit under section 65 of C.G.S.T. Act is in progress and the issue in the said case was also regarding grant of opportunity of hearing before attachment of the bank account under section 83 of the C.G.S.T. Act, therefore the aforesaid case relied upon by learned counsel for opposite party No. 2 is distinguishable on facts and not applicable in the facts of present case.

19. In the case of Vikalp Jain (supra), the fact of the case was that the applicant was actively involved in evasion of G.S.T. to the tune of more than ₹ 94,00,00,00/- (rupees ninety four crore only) in violation of provisions of C.G.S.T. Act, 2017 and the applicant was released on bail subject to condition to deposit ₹ 1,00,00,000/- (rupees one crore only) within three months from the date of release on bail vide order dated 19.07.2019. In the said case, prayer was made to waive or reduce one of the conditions of bail to deposit ₹ 1,00,00,000/- (rupees one crore only).

The said writ petition was dismissed. Here, it is relevant to mention that in the said case, against the alleged evasion of tax of ₹ 94,00,00,000/- (rupees ninety four crore only), the petitioner had not deposited any amount, whereas in the present case against the evasion of tax of ₹ 9,51,00,000/- (rupees nine crore fifty one lac only), the applicant has already deposited more than 50% of the disputed amount, therefore, on facts the said case is also not helpful to opposite party No. 2.

20. It is well settled that every case turns on its own facts. Even one additional or different fact may make big difference between the conclusion in two cases, because even a single significant detail may alter entire aspect.

21. Here it is relevant to quote Sub-section (3) of Section 437 Cr.P.C., which inter alia, provides that:

“when a person accused or suspected of the commission of an offence punishable with imprisonment which may extend to seven years or more or of an offence under Chapter VI, Chapter XVI or Chapter XVII of the Penal Code (45 of 1860) or abetment of, or conspiracy or attempt to commit, any such offence, is released on bail under sub-section (1), the court shall impose the conditions-

“(a) that such person shall attend in accordance with the conditions of the bond executed under this Chapter,

(b) that such person shall not commit an offence similar to the offence of which he is accused, or suspected, of the commission of which he is suspected, and

(c) that such person 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 him from disclosing such facts to the court or to any police officer or tamper with the evidence.” and may also impose, in the interests of justice, such other conditions as it considers necessary.”

22. In view of aforesaid discussion, this Court is of the view that conditions for grant of bail ought not to be so strict as to be incapable of compliance, thereby making a grant of bail illusory. The conditions while granting bail should be reasonable, so that it may not frustrate the very object of granting bail. Discretion exercised by the Court while imposing conditions should not be arbitrary, but it should be keeping in mind to strike balance between the accused and prosecution. In the present case, it is admitted facts to the counsel for the parties that as on date out of disputed amount of ₹ 9,51,00,000/- (rupees nine crore fifty one lac only), the applicant has already deposited a sum of ₹ 5,00,00,000/- (rupees five crore only). Till date neither any criminal complaint has been filed, nor any proceedings under section 73 or 74 of the C.G.S.T. Act has been initiated against the applicant by the Department. The enquiry proceedings is still under process. The determination of input tax credit wrongly availed has not been finally made by the Department and no order under section 83 of the C.G.S.T. Act for provisional attachment of any property including the bank account belonging to the applicant has been made. The order granting bail to the applicant has also not been challenged by the Department.

23. Considering the facts and circumstances of the case as well as averments as mentioned in paragraph 2 of the second supplementary affidavit dated 22.02.2021, this Court is of the view that condition No. 4 imposed by Special Chief Judicial Magistrate, Meerut directing the applicant to deposit remaining amount of ITC ₹ 4,51,00,000/- (rupees four crore fifty one lac only) before the Department within three months while granting bail to the applicant, is unsustainable, as it is too harsh and unreasonable, particularly in the situation where enquiry/investigation is still pending and applicant has already deposited ₹ 5,00,00,000/- (rupees five crore only), out of disputed amount of ₹ 9,51,00,000/- (rupees nine crore fifty one lac only). In view of above, in order to save the Government revenue, the interest of justice would be served in case, the condition No. 4 of bail order dated 24.11.2020 is modified directing the applicant to submit security equivalent to remaining disputed amount of ₹ 4,51,00,000/- (rupees four crore fifty one lac only), other than cash and bank guarantee along with his affidavit in place of deposit the remaining amount of ITC of IGST, before the Senior Intelligence Officer, DGGI, Regional Unit, Ghaziabad within three weeks from today, as per the undertaking given by the applicant before this Court.

24. In view of aforesaid facts and for the reasons stated above, the condition No. 4 of the bail order dated 24.11.2020 is modified to the extent as mentioned above. On non-furnishing security by the applicant as per his undertaking before this Court, it is open for opposite party No. 2 to move bail cancellation application.

25. Accordingly, the bail application under section 439 (1)(b) of the Code of Criminal Procedure, is disposed of in the aforesaid terms.