Heard Sri Nishant Mishra, learned counsel for the applicant, Sri Dileep Chandra Mathur, learned counsel for the opposite party no.2 and Sri Sudarshan Singh, learned counsel for opposite party no.3 and perused the record.

It has been argued by learned counsel for the applicant that applicant is innocent and he has been falsely implicated in the present case. According to the prosecution version, on 29.09.2021 searches were conducted by the officers of Directorate General of Goods & Service Tax Intelligence, Regional Unit, Kanpur (hereafter referred to as ‘DGGSTI’) at various places relating to firm, namely, M/s Vikas & Company, during which cash of ₹ 1,23,61,000/- was seized and certain records were taken into custody. It was alleged by the prosecution that sole proprietor of said firm was Smt. Sushma Devi (mother of applicant), who expired on 28.04.2021 but the registration certificate was not surrendered and no returns were being filed and that all the activities of business of firm was controlled and managed by applicant in term of Section 93 of the Central Goods & Services Tax Act, 2017. Learned counsel submitted that applicant was not having good relations with his parents and brothers at Kanpur as applicant has married with a Muslim lady and applicant along with his wife was residing in New Delhi and that applicant was not involved in business of his parents. It was stated that mother of applicant, namely, Smt. Sushma Devi, was proprietor of two firms by the name of M/s Vikas & Company, which were engaged in business of manufacture and sales of branded chewing tobacco. Upon enforcement of GST regime with effect from 01.07.2017, one of the firm, namely, Vikas & Company (GSTIN : 09AELPD1786P1ZT) was migrated into GST and was granted registration certificate but another firm M/s Vikas & Company (GSTIN:09AELPD1786P2ZS) initially choose not to migrate but later on it has applied and was granted registration w.e.f. 17.09.2017. After death of his mother, the applicant has settled in Lucknow and was doing business of aromatic essences. Learned counsel submitted that after death of mother of applicant, neither the applicant nor his two brothers conducted business activities of said two firms and that the brothers of applicant have got registration certificate of M/s Vikas and Company (GSTIN : 09AELPD1786P2ZS) cancelled vide order dated 07.09.2021 and that they have also tried to get the registration certificate of another firm M/s Vikas & Company (GSTIN :09AELPD1786P1ZT), cancelled but the same could not be done. Learned counsel submitted that on 29.09.2021 the officers of DGGSTI conducted search at several premises pertaining to said firm but the authorities grossly violated the provisions of Section 100(4) of Code of Criminal Procedure, 1974. After conducting searches, applicant was illegally taken into custody from 29.09.2021 to 01.10.2021 and he was tortured to give evidence against himself and that to justify their action, applicant was served with summon dated 29.09.2021, under Section 70 of the CGST Act. Learned counsel argued that the officers of DGGSTI got confessional statement of applicant to the effect that he is living in Kanpur and he is authorized signatory of his late mother’s firm and said statements are sole basis of arrest of the applicant. Referring to provisions of Section 7 and 69 of CGST Act, 2017, it has been submitted that arrest of the applicant was not justified. It has further been submitted that whether the registered person i.e. M/s Vikas and Company has supplied any goods or services in violation of statutory provisions with intention to evade payment of tax, is a matter of assessment/adjudication under Section 73 or 74 of CGST Act, 2017 and till the same is carried out, it cannot be said that M/s Vikas & Company is engaged in massive suppression of production and clandestine clearance of branded chewing tobacco. Referring to the case of Jayachandran Alloys (P) Ltd. vs. Superintendent of GST and C.Ex., Salem 2019 [25] G.S.T.L.321, it has been submitted that there being no assessment or adjudication on the facts against M/s Vikas & Company, thus, the arrest of the applicant, who was not even proprietor of said firm, is wholly illegal and without authority of law. Referring to Section 93 of CGST Act, it has been submitted that provisions of this section can be invoked only after determination of tax, which has not been taken place yet in the present case. It was submitted that authorized signatory of M/s Vikas & Company was late mother of applicant and that applicant has not signed any invoice, cheque or any other document on behalf of M/s Vikas & Company and that applicant has no connection with day-to-day business of the said firm and thus, the allegation of opposite party no.2 that applicant is authorized signatory of the said firm is completely false. It has further been submitted that even if the confessional statement of applicant is to be believed and if an offence under Section 132(1)(a) is made out, then also the total amount of tax evasion is around ₹ 1,01,76,022/-, which falls under clause (iii) of Section 132(1) and it is a bailable offence. The Commissioner while issuing authorization of arrest has not recorded appropriate reasons and that tabulation made by opposite party no.2 is highly inflated and incorrect. Further, against adjudication order, M/s Vikas & Company has statutory right of appeal by making pre-deposit disputed amount of tax. Learned counsel has given much thrust to the argument that till date opposite party no.2 has not quantified quantum of tax alleged to be evaded and statements made before the Court below regarding quantum being more than ₹ 5 crores has no basis and thus, the case of the applicant falls within the ambit of bailable, non-cognizable and compoundable offence. Learned counsel has referred the case of Akhil Krishan Maggu and Another vs. Deputy Director, Directorate General of GST Intelligence and Others [2019 SCC OnLine P&H 5416] and the case of Daulat Samirmal Mehta vs. Union of India (2021)124 Taxmann.com398(Bombay) and submitted that there is no credible evidence against the applicant. It was submitted that case involves only documentary evidence and that in case the applicant is granted bail there is no possibility of tempering with the evidence and that applicant has no criminal history. Lastly, it was submitted that the applicant is languishing in jail since 02.10.2021.

Sri Dileep Chandra Mathur, learned counsel for the opposite party no.2 and Sri Sudarshan Singh, learned counsel for opposite party no.3 have opposed the prayer for bail and argued that on the intelligence that M/s Vikas & Company [GSTIN- 09AELPD1786P1ZT] is engaged in clandestine supply of goods to cities leading tax evasion, an inquiry was initiated and after approval of the competent authority, simultaneously search operations were conducted at various locations relating to said M/s Vikas & Co. by DGGI officials, which resulted into recovery of incriminating documents. It was stated that said firm M/s Vikas & Company was got registered as firm of Smt. Sushma Devi, who expired on 28.04.2021. The applicant who is eldest son of Smt. Sushma Devi and his brothers, have not surrendered GST and Central Excise Registration and were filing nill returns from April 2021 onwards. The applicant is authorized signatory of the said firm from the year 2018 onwards and as per evidence come in notice, it was found that all activities are controlled and managed by applicant Vishwa Jeet Verma with the help of his brothers. The applicant accused was summoned vide summons dated 29.09.2021 and he has made statement, from which it appears that M/s Vikas & Co. is engaged in massive suppression of production and clandestine clearance of branded chewing tobacco and applicant is main person, who control and manages firm M/s Vikas & Company since 2017 and he was instrumental of cash transactions related to uncounted outward supply of BCT and uncounted purchase of raw materials. It has been submitted that the tabulation conducted so far has reveled evasion of GST of ₹ 1,01,76, 022/- and Central Excise duty of ₹ 31,90,909/- for four months from January 2021 to April 2021 and that applicant has admitted monthly uncounted sale of M/s Vikas & Company is about 25-30 lakhs and in view of these facts, admitted total GST evasion would be more than ₹ 5 crores. It has been submitted that investigation is still going on and voluminous incriminating documents and articles showing the evasion of GST of more than ₹ 5 crores are under scrutiny.

I have considered the rival submissions and perused the record. It would be pertinent to mention that in case of Nitin Verma vs. State of Uttar Pradesh, 2021 (49) GSTL 357 (All) the coordinate Bench of this Court has held has under:

“7. After considering the aforesaid authorities, the Punjab and Haryana High Court has concluded in aforesaid judgement as follows :-

122. The following factors and parameters can be taken into consideration while dealing with the anticipatory bail:

i. The nature and gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made;

ii. The antecedents of the applicant including the fact as to whether the accused has previously undergone imprisonment on conviction by a Court in respect of any cognizable offence;

iii. The possibility of the applicant to flee from justice;

iv. The possibility of the accused’s likelihood to repeat similar or the other offences.

v. Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her.

vi. Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people.

vii. The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which accused is implicated with the help of Sections 34 and 149 of the Indian Penal Code, the court should consider with even greater care and caution because over implication in the cases is a matter of common knowledge and concern;

viii. While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused;

ix. The court to consider reasonable apprehension of tampering of the witness or apprehension of threat to the complainant;

x. Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused is entitled to an order of bail.

123. The arrest should be the last option and it should be restricted to those exceptional cases where arresting the accused is imperative in the facts and circumstances of that case.

124. The court must carefully examine the entire available record and particularly the allegations which have been directly attributed to the accused and these allegations are corroborated by other material and circumstances on record.

125. These are some of the factors which should be taken into consideration while deciding the anticipatory bail applications. These factors are by no means exhaustive but they are only illustrative in nature because it is difficult to clearly visualise all situations and circumstances in which a person may pray for anticipatory bail. If a wise discretion is exercised by the concerned judge, after consideration of entire material on record then most of the grievances in favour of grant of or refusal of bail will be taken care of. The legislature in its wisdom has entrusted the power to exercise this jurisdiction only to the judges of the superior courts. In consonance with the legislative intention we should accept the fact that the discretion would be properly exercised. In any event, the option of approaching the superior court against the court of Sessions or the High Court is always available.

126. Irrational and Indiscriminate arrest are gross violation of human rights. In Joginder Kumar’s case (supra), a three Judge Bench of this Court has referred to the 3rd report of the National Police Commission, in which it is mentioned that the quality of arrests by the Police in India mentioned power of arrest as one of the chief sources of corruption in the police. The report suggested that, by and large, nearly 60% of the arrests were either unnecessary or unjustified and that such unjustified police action accounted for 43.2% of the expenditure of the jails.

127. Personal liberty is a very precious fundamental right and it should be curtailed only when it becomes imperative according to the peculiar facts and circumstances of the case.”

Keeping in view the aforesaid case law as well as other authorities and provisions referred by the learned counsel for the parties, in the instant matter, perusal of record shows that Smt. Sushma Devi, who is mother of applicant, was sole proprietor of alleged M/s Vikas & Company and she expired on 28.04.2021. As per prosecution version, applicant-accused, being her eldest son, was looking after and co-operating of manufacturing and supplies of activities in the name of M/s Vikas & Company and as per documents, applicant and his brothers are actual beneficiaries and that tabulation conducted so far has reveled evasion of GST of ₹ 1,01,76,022/- and Central Excise duty of ₹ 31,90,909/-. In this connection it would be pertinent to mention that in the instructions of opposite party nos. 2 and 3 in paragraph no. 6(g) and (h), it has been mentioned as under:

g. The tabulation conducted so far has revealed evasion of GST of ₹ 1,01,76,022/- and Central Excise duty to tune ₹ 31,90,909/- (for the four months i.e. January 2021 to April 2021), whereas such documents of the clandestine supplies are resumed for 51 months i.e. July, 2017 to September, 2021, the tabulation of the same are being done by the investigation team.

h. From the statement dated 29.09.2021 of Shri Vishwajeet Verma wherein he has admitted that the monthly unaccounted sale of M/s Vikas and Co. is about 25-30 lacs, thereby an admission of evasion of GST of about ₹ 18-20 lacs per month, thus thereby in view of the such available evidences for the 51 months, it appears the admitted total GST evasion is more than ₹ 5 Crores.

Thus, it is apparent that so far evasion of GST of ₹ 1,01,76,022/- and Central Excise duty of ₹ 31,90,909/- has been revealed, however, it has been stated that investigation is still going on and that on the basis of assumption, total GST evasion is more than ₹ 5 crores. It is not disputed that an amount of ₹ 1,23,61,000/- was seized from premises of said firm, which was taken into possession by the DGGI officials. This legal proposition could also not be disputed that as per provisions of Section 132(1)(iii) of Central Goods and Services Tax Act 2017, the evasion of tax of ₹ 1,01,76,022/- is a bailable offence and that in this case, amount of ₹ 1,23,61,000/- has already been seized from the premises of applicant. It could also not be disputed that against the adjudication order, the alleged firm has statutory right of appeal by making pre-deposit disputed amount of tax. It could also not be disputed that till date opposite party nos. 2 and 3 have not quantified quantum of total tax alleged to have been evaded. The applicant is stated in custody since 01.10.2021, having no criminal antecedents.

Keeping in view the submissions of learned counsel for the parties, entire facts of the matter brought on record, quantum of evasion of tax involved in the matter, period of custody of applicant and all attending facts and circumstances of the case, the Court is of the view that a case for bail is made out. Hence, the bail application is hereby allowed.

Let the applicant Vishwa Jeet Verma involved in Case Crime No. DGGI/KRU/INV/GR-A/21/2021, under Section 132(1)(a) and 132(5) of the Central Goods and Services Tax Act, 2017, P.S. D.G.G.I. Sarvodaya Nagar, District Kanpur, be released on bail on furnishing each a personal bond and two sureties each in the like amount to the satisfaction of the court concerned subject to following conditions:

1. The applicant shall cooperate with Investigating agency and he shall appear before the officer concerned as and when required.

2. If the applicant holds passport, he shall surrender his passport before the trial Court and he shall not leave the country without the leave of the trial Court.

3. The applicant shall not tamper with the evidence during the trial.

4.The applicant shall not pressurize/ intimidate the prosecution witness.

5.The applicant shall appear before the trial court on the date fixed, unless personal presence is exempted.

6. The applicant shall not commit an offence similar to the offence of which he is accused, or suspected, of the commission of which he is suspected.

7.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 them from disclosing such facts to the Court or to any police officer or tamper with the evidence.

In case of breach of any of the above condition, the Court below shall be at liberty to cancel bail of applicant in accordance with law.