The Madhya Pradesh High Court granted the bail to the promoters of Bhopal based Som Distilleries for alleged Tax Evasion on furnishing a personal bond in the sum of Rs.5 lakhs.
The applicants, Jagdish Arora and Ajay Kumar Arora were taken into custody by the Central Goods and Service Tax Department, while their formal arrest was shown under Section 69 of the CGST Act, and they have been in jail since July 9, 2020.
The instant case arises out of proceedings initiated by the CGST Department in relation to purported evasion of Goods and Service Tax (GST) by the Company, Som Distilleries Pvt. Ltd. (SDPL) purportedly leviable and evaded on account of production and sale of sanitizers.
At the outset, the petitioners claimed that neither Jagdish Arora nor Ajay Kumar Arora, the applicants herein, are Directors/ Managers/Officers/employees or authorized representatives of the SDPL and as such, they are not responsible for the day-to-day business affairs of the Company.
The GST authorities had communicated that the demand of GST liability was made to the extent of Rs.7,96,00,000/-. Thus, in order to demonstrate its bona fide, the SDPL immediately deposited Rs. 8 crores under protest. According to the petitioners, the CGST Department has now increased the purported liability to Rs. 33 crores as an afterthought.
The division bench headed by Chief Justice Ajay Kumar Mittal while granting the bail observed that there is no documentary material produced on record to show that the present applicants were legally in charge and responsible for the day-to-day working of the Company.
“It is directed that the applicants, Jagdish Arora and Ajay Kumar Arora be released from custody on their furnishing a personal bond in the sum of Rs.5,00,000 each, with separate sureties of the like sum to the satisfaction of the trial Court,” the division bench said.
The High Court further put forth several conditions, while granting the bail to the applicants.
Firstly, the applicants shall cooperate with the trial and shall not seek unnecessary adjournments on frivolous grounds to protract the trial.
Secondly, the applicants shall not directly or indirectly allure or make any inducement, threat or promise to the prosecution witnesses, so as to dissuade them from disclosing truth before the Court.
Thirdly, the applicants shall not commit any offence or involve themselves in any criminal activity.
Fourthly, in case of their involvement in any other criminal activity or breach of any other aforesaid conditions, the bail granted in this case may also be cancelled.
Fifthly, the applicants shall submit their passports, if any, before the trial Court and shall not leave India without prior permission of this Court.
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