Supreme Court Grants Bail in GST Offence Case: Mohit Bathla vs. Central Goods and Service Tax (2022)

Date of the Judgment: March 31, 2022

Citation: 2022 INSC 286

Judges: Uday Umesh Lalit, J., S. Ravindra Bhat, J., Pamidighantam Sri Narasimha, J.

Can an individual accused of offences under the Central Goods and Services Tax Act, 2017 (CGST Act) be granted bail? The Supreme Court of India addressed this question in the case of Mohit Bathla vs. Central Goods and Service Tax. The court considered an appeal against the High Court’s decision to deny bail to the appellant, who was accused of offences under the CGST Act. The Supreme Court, in this case, ultimately granted bail to the appellant, continuing the ad-interim bail previously granted, subject to certain conditions. The bench comprised Justices Uday Umesh Lalit, S. Ravindra Bhat, and Pamidighantam Sri Narasimha.

Case Background

The appellant, Mohit Bathla, was taken into custody on December 25, 2020, in connection with a crime registered following a complaint dated February 24, 2021. The complaint alleged offences punishable under Sections 132 and 134 of the Central Goods and Services Tax Act, 2017. The case was before the Court of the Chief Judicial Magistrate, Panipat. The appellant then sought bail under Section 439 of the Code of Criminal Procedure, 1973, which was denied by the High Court of Punjab and Haryana at Chandigarh. This led to the filing of the appeal before the Supreme Court.

Timeline

Course of Proceedings

The appellant’s application for bail under Section 439 of the Code of Criminal Procedure, 1973 was dismissed by the High Court of Punjab and Haryana at Chandigarh. Subsequently, the appellant approached the Supreme Court. The Supreme Court initially granted ad-interim bail on May 13, 2021, subject to the appellant depositing ₹1 crore within four weeks and then three further deposits of ₹1 crore each within one, two, and three months respectively. The total deposit required was ₹4 crores, which the appellant complied with. The Supreme Court noted that the appellant had deposited the required amount and had been enjoying the benefit of ad-interim bail.

Legal Framework

The case involves the following legal provisions:

• Section 132 of the Central Goods and Services Tax Act, 2017: This section deals with offences related to GST, including fraudulent availing of input tax credit, and the punishments for such offences.
• Section 134 of the Central Goods and Services Tax Act, 2017: This section deals with offences related to obstruction or prevention of any officer in the discharge of their duty under the Act.
• Section 439 of the Code of Criminal Procedure, 1973: This section deals with the power of the High Court or the Court of Session to grant bail.

Arguments

Appellant’s Arguments:

• The appellant argued for the grant of bail, emphasizing that he had already complied with the conditions set by the Supreme Court for ad-interim bail, including the deposit of ₹4 crores.
• The appellant contended that he had not misused his liberty while on ad-interim bail.

Respondent’s Arguments:

• The respondent, represented by the Additional Solicitor General, did not raise any specific objections to the continuation of the appellant’s bail, given that the appellant had already complied with the conditions for ad-interim bail.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in the order. However, the core issue was whether the appellant should continue to be on bail, given that he had complied with the conditions of ad-interim bail.

Treatment of the Issue by the Court

Authorities

The Supreme Court did not explicitly cite any authorities in this order. The decision was based on the specific facts and circumstances of the case, particularly the appellant’s compliance with the ad-interim bail conditions.

Judgment

The Supreme Court allowed the appeal and directed that the appellant shall continue to be on bail on the same conditions as the ad-interim bail. The security and documents of surety furnished at the stage of ad-interim bail were to continue as conditions of bail. The amount of deposit was to await the final orders at the conclusion of the proceedings. The Court also directed that the appellant shall not misuse his liberty, and any infraction may lead to the withdrawal of the benefit of bail.

What weighed in the mind of the Court?

The primary factors that weighed in the mind of the Court were the appellant’s compliance with the ad-interim bail conditions and the absence of any indication that he had misused his liberty. The Court noted that the appellant had deposited ₹4 crores as directed and had been enjoying the facility of ad-interim bail. This compliance and the lack of any adverse conduct were key in the Court’s decision to allow the appellant to continue on bail.

The Court’s reasoning was primarily based on the factual aspects of the case, specifically the compliance with the ad-interim bail conditions and the absence of any misuse of liberty. The legal aspect, while present, was secondary to the factual considerations.

“Considering the facts and circumstances on record, we allow the appeal and direct that the appellant shall continue to be on bail on the same conditions on which he was allowed the facility of ad-interim bail.”

“The security and documents of surety furnished at that stage shall continue to be operative as conditions of bail.”

“The amount of deposit shall await the final orders to be passed at the conclusion of the proceedings in the aforesaid complaint.”

Key Takeaways

• Compliance with ad-interim bail conditions is a significant factor in the continuation of bail.
• The Court considers the conduct of the accused while on ad-interim bail.
• Deposits made as a condition of bail are subject to the final outcome of the case.

Directions

The Supreme Court directed that:

• The appellant shall continue to be on bail on the same conditions as the ad-interim bail.
• The security and documents of surety furnished at the stage of ad-interim bail shall continue as conditions of bail.
• The amount of deposit shall await the final orders at the conclusion of the proceedings.
• The appellant shall not misuse his liberty, and any infraction may lead to the withdrawal of the benefit of bail.

Development of Law

The judgment reinforces the principle that compliance with court-ordered conditions, such as the deposit of money, and good behavior while on ad-interim bail are crucial factors in determining whether bail should be continued. This decision does not introduce any new legal principles but applies existing principles to the specific facts of the case.

Conclusion

In conclusion, the Supreme Court allowed the appeal, directing that the appellant, Mohit Bathla, shall continue to be on bail. This decision was primarily based on the appellant’s compliance with the ad-interim bail conditions, including the deposit of ₹4 crores, and the absence of any misuse of liberty. The Court emphasized that the amount deposited would be subject to the final orders passed at the conclusion of the proceedings and that any misuse of liberty could lead to the withdrawal of the bail benefit.