Sanjay Kumar Bhuwalka And Neeraj Jain vs. Union Of India
(Calcutta High Court, West Bengal)

Case Law
Petitioner / Applicant
Sanjay Kumar Bhuwalka And Neeraj Jain
Union Of India
Calcutta High Court
West Bengal
Jul 12, 2018
Order No.
CRM 3327 of 2018 CRAN 1800 of 2018 With CRM 3328 of 2018 CRAN 1799 of 2018
TR Citation
2018 (7) TR 2968
Related HSN Chapter/s
Related HSN Code


This is an application for relaxation and/or modification and/or waiver of conditions of bail vide order dated 9th July, 2018 passed by this Court in CRR 3327 of 2018 thereby enlarging the petitioner on bail in connection with Case No.C-216 of 2018 arising out of DGCEI F. No.29/KZU/KOL/GR.D of 2018 dated 13th May, 2018 under Section 132(1)(a), (b) and (c) of the Central Goods and Services Tax Act, 2017 inter alia directing that the accused be released on bail on furnishing bond of the sum of ₹ 50 lakh and on condition to deposit ₹ 39 crore to the Government Exchequer through the competent authority with a further direction to appear before the Investigating Officer/Authority holding investigation to assist the investigating machinery as and when called upon and to appear before the authority concerned till the final investigation or till the offence is compounded under the provision subject to the satisfaction of the learned Additional Chief Judicial Magistrate, Sealday.

The grounds taken for relaxation is that the condition enshrined in the order is very severe condition and next impossible for the petitioner to comply with the condition.

Mr. Sekhar Basu, learned senior counsel has straightway invited my attention to the provision of Section 158 of the Central Goods and Services Act, 2017 providing for compounding the offences and points out that the amount of compounding the offences under this section shall be such as may be prescribed subject to the minimum amount not being less than ₹ 10,000/- or 50% of the tax involved whichever is higher and the maximum amount not being less than ₹ 30,000/- or 50% of the tax whichever is higher.

Mr. K. K. Maiti, learned counsel appearing on behalf of the Union of India invites my attention to the provision of Section 49 of the Act which deals with payment of tax, interest, penalty and other amounts. My attention is also adverted to the provision as enshrined in Section 74 of the Act which provides for determination of tax not paid or short paid or erroneously refunded or input tax credit rightly availed or utilized by reason of fraud or any wilful mis-statement or suppression of facts. My attention is also invited to the GST Law Manual relating to prosecution and compounding of the offences punishable under this Act relating to prosecution for certain criminal offences prescribed under Section 132 of CGST/SGST Act, 2017.

The provisions as shown to this to me are undoubtedly very very stringent nittigrity of laws of the provision in this Act. In rebuttal, Mr. Basu draws my attention in his argument that provision of Section 75 relating to general provisions for determination of tax is also required to be looked into. If one gives a bare perusal of the provisions and even the provision under Sub- Section (2) of Section 138 which deals with compoinding of offences, I have left no option but to observe that the said provision is also very stringent.

Be that as it may, prima facie allegation as per the investigating agency as observed in my orders dated 9th July, 2018 reflects that various companies which are controlled by the petitioners passed on vague input GST credit to the tune of ₹ 27 crore and ₹ 12 crore respectively. It appears that the allegation against the petitioner Sanjay Kumar Bhawalka is that of evasion of ₹ 27 crore as of now, similarly, the evasion of GST as alleged against Neeraj Jain is a sum of ₹ 12 crore. Therefore, the condition for enlargement of bail to the petitioner on deposit of ₹ 39 crore to the Government Exchaquer through the competent authority is modified to the extent that Sanjay Kumar Bhuwalka the petitioner on condition shall deposit 50% of the evaded amount of ₹ 27 crore. Similarly, the petitioner Neeraj Jain would deposit ₹ 6 crore being the 50% of evaded amount of ₹ 12 crore as a condition to obtain bail.

It is also pointed out by Mr. Basu assisted by Mr. Milon Mukherjee, learned senior advocate for the petitioners that in West Bengal, there is no surety having the strength to extant for surety of the petitioner to furnish bond of a sum of ₹ 50 lakh each. I am of the considered view that this condition of furnishing bond be modified to the sum of ₹ 10 lakh each which can be furnished by way of personal bond to be executed by the petitioners. Therefore, the order dated 9th July, 2018 is modified.

However, the order dated 9th July, 2018 be modified to the extent that the petitioners be enlarged on bail by furnishing personal recognition bond of ₹ 10 lakh each and on further condition to deposit 50% of the evaded amount respectively as discussed in the foregoing paragraph with further condition remaining the same as ordered earlier subject to the satisfaction of the learned Additional Chief Judicial Magistrate, Sealdah.

Thus, the applications being CRAN 1800 of 2018 and CRAN 1799 of 2018 are disposed of.  

Urgent photostat certified copy of this order, if applied for, shall be given to the parties as expeditiously as possible.

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