While relaxing the norms for granting bail to the accused persons in a 40 crore rupees GST scam, the Calcutta High Court expressed a view that the provisions for compounding of offence under the new Goods and Services Tax (GST) law is very stringent.
“If one gives a bare perusal of the provisions and even the provision under SubSection (2) of Section 138 which deals with compounding of offences, I have left no option but to observe that the said provision is also very stringent,” Justice Shivakant Prasad said.
As per 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 Rs.10,000/- or 50% of the tax involved whichever is higher and the maximum amount not being less than Rs.30,000/- or 50% of the tax whichever is higher.
The petitioners, Sanjay Kumar Bhuwalka and Neeraj Jain were arrested on 12.05.2018 due to their involvement in the business of generating and selling of fake tax invoices to various entities without supplying the underlying goods or services, thereby facilitating irregular availment and utilization of input tax credit by such entities to whom such fake invoices were issued.
The High Court, while granting bail to the petitioners had imposed certain conditions such as furnishing bond of the sum of Rs. 50,00,000/- each on condition to deposit of Rs. 39 crore to the Government Exchequer through the competent authority with direction to appear before the I.O./Authority holding investigation to assist the investigating machinery.
Before the High Court, the petitioners urged 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 Rs.50 lakh each.
Allowing the contentions, the High Court modified the condition of furnishing bond to the sum of Rs.10 lakh each which can be furnished by way of personal bond to be executed by the petitioners.
“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 Rs.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,” the Court said.
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