Only after the expiry of previously stipulated time frame can assesse be held not exempt from tax liability. Bail application was allowed as per provisions of section 439 of the Code of Criminal Procedure, 1973 .

Offences and penalties — Punishment for certain offences — Tax exemption and evasion — Bail application under section 439 of the Code of Criminal Procedure, 1973 — Assesse imported goods exempt from tax subject to conditions that products made be exported within eighteen months — Assesse arrested contended no notice for assessment issued by authorities — Charge-sheet disclosed tax evasion of Rs. 25 crores — Contended where tax evaded less than Rs. 5 crores, offence bailable — Revenue opposed bail application — Held, tax on import payable after expiry of 18 months — Export not made within 18 months, then assesse liable to pay in accordance with bond executed — No notice with regard to tax outstanding issued to assesse — Personal bond to be furnished in sum of Rs. 10 lac with two sureties in sum of Rs 5 lac — Passport to be surrendered — Bail application allowed.

1. Petitioner has filed this second bail application under Section 439 of Cr.P.C.

2. Criminal Case No.143/2019, pending before the Chief Metropolitan Magistrate, Jaipur (Economic Offence Court) having case No.J/C (ADM.)/Alwar,2018-19/379 for offence under Sections 132(1)(a) read with Section 132(1)(h), (j) and (k) of the Rajasthan Goods and Services Act, 2017 (RGST).

3. It is contended by counsel for the petitioner that petitioner imported goods worth Rs.108 crores in the year 2018. The first import was on 24.05.2018. Goods were exempted from tax subject to the condition that the products made from the goods were to be exported within a period of eighteen months. It is contended that the period of eighteen months have not expired till date. It is also contended that on special reasons being shown the period of export was extended by a period of six months and after period of six months to be extended on special conditions. It is contended that no notice for assessment was even issued by the authorities. A fire took place in the factory of the petitioner on 03.09.2018 which was reported to the police and fire brigade.

4. It is also contended that petitioner was arrested on 07.06.2019. Charge-sheet has been filed. In the charge-sheet details of E-way bills and Outward E-way bills are given from which it is revealed that total Inward supplies were to the tune of Rs.133 crores and the Outward supplies were to the tune of Rs.32 crores. It is contended that charge-sheet discloses different hands. At one place, the E-way supply is shown as Rs.143 crores, whereas at a different paragraph, the E-way supply is shown as Rs.133 crores. It is contended that Department has shown two Inward supplies to E-way bills and has come to the conclusion that there is an evasion of tax of about Rs.25 crores, whereas from the E-way bills generated, it is revealed that only Inward supply was to the tune of Rs.133 crores out of which Rs.108 crores goods were imported by the petitioner which was exempted and for which a bond was executed by the petitioner. The said bond as per the Foreign Trade Policy and the exemptions given, the period of export was to expire in November, 2019. It is contended that petitioner is a status holder as per Para-3.20 of the Foreign Trade Policy and he falls in the status category of One-Star Export House.

5. It is also contended that the factory of the petitioner is attached by the Department and Bankruptcy proceedings have been initiated and Resolution Professional has been nominated and he has taken over the charge of the factory. It is also contended that where tax evaded is less than Rs.5 crores the offence is bailable. It is also contended that petitioner was a Director in the Company and the other Co-Directors-father and wife of petitioner have not been charge-sheeted by the Department.

6. Counsel for the petitioner has placed reliance on “M/S. Jayachand Alloys (P) Ltd. vs. Commissioner of Gst, Writ Petition No.5501/2019, decided by Madras High Court on 04.04.2019.”

7. Reliance has also been placed on “Gaurav Kumar Aanchaliya vs. Union of India decided by Rajasthan High Court in S.B. Criminal Misc. Bail Application No.3624/2019 on 13.05.2019” and “Pradeep vs. Commissioner of GST & Central Excise Selam & Anr., Special Leave to Appeal (Crl.) No(s).6834/2019, decided by Apex Court on 06.08.2019.”

8. Learned counsel appearing on behalf of Commercial Tax Department has vehemently opposed the second bail application.

It is contended that at the premises of the factory, the stock was found and physical verification was only worth about Rs.2 crores. There was thus a deficit of stock to the tune of Rs.101 crores. It is contended that petitioner has sold the goods without generating the Outward supply invoice and has thus evaded tax to the tune of Rs.18 crores.

9. It is also contended that the total evasion of tax is to the tune of Rs.25 crores, hence, petitioner is not entitled to grant of bail. It is also contended that petitioner has imported the goods but has not exported the goods, hence, he has evaded the tax and customs duty. It is argued that the import was worth Rs.108 crores and export was only to the tune of rupees three crore fifty five lac, thus petitioner has evaded tax.

10. I have considered the contentions.

11. The offence as alleged in the FIR is under Sections 132(1)(a) read with Section 132(1)(h), (j) and (k) of the Rajasthan Goods and Services Act, 2017, the maximum sentence provided under Section 132(a)(i) is five years. From the E-way bills produced with the charge-sheet, it is revealed that the total Inward supply was to the tune of Rs.133 crores which included the import of Rs.108 crores made by the petitioner. The total Outward supply was to the tune of Rs.32 crores. Since the total Outward supply other than the goods imported by the petitioner is concerned is only to the tune of Rs.25 crore. Tax on the import would become payable only after the expiry of 18 months. Tax on the remaining amount is fall below Rs.5 crore. Deposit of Rs.2.5 crore is already lying with the Authorities.

12. In the charge-sheet itself, the report of fire made to the police and the fire brigade is also available which goes to show that fire took place in the factory premises of the petitioner. Petitioner has already furnished the bond with regard to import of Rs.108 crores and in case the export is not made within eighteen months, he is liable to pay in accordance with bond executed by him. Petitioner has remained in custody for a period of more than five months. No notice with regard to tax outstanding has ever been issued to the petitioner.

13. In view of the same and judgments cited by counsel for the petitioner, I deem it proper to allow the second bail application.

14. This second bail application is accordingly allowed and it is directed that accused petitioner shall be released on bail provided he furnishes a personal bond in the sum of Rs.10,00,000/- (Rupees Ten Lac only) together with two sureties in the sum of Rs.5,00,000/- (Rupees Five Lac only) each to the satisfaction of the learned trial court with the stipulation that he shall appear before that Court and any court to which the matter is transferred, on all subsequent dates of hearing and as and when called upon to do so.

15. Petitioner is directed to deposit the Passport with the trial Court and will not be entitled to leave the country without seeking prior permission of the trial Court.

(PANKAJ BHANDARI),J

LEGAL REFERENCES

Section 9 Section 5 Section 2 Section 25 Section 11 Section 18 Section 132(1)(a) Section 439 Section 108 Section 32 Section 143 Section 133 Section 101 Section 132(1)(h) Section 132(a)(i)

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Only after the expiry of previously stipulated time frame can assesse be held not exempt from tax liability. Bail application was allowed as per provisions of section 439 of the Code of Criminal Procedure, 1973 .

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1. Petitioner has filed this second bail application under Section
439 of Cr.P.C.
 2. Criminal Case No.143/2019, pending before the Chief
Metropolitan Magistrate, Jaipur (Economic Offence Court) having
case No.J/C (ADM.)/Alwar,2018-19/379 for offence under Sections
132(1)(a) read with Section 132(1)(h), (j) and (k) of the
Rajasthan Goods and Services Act, 2017 (RGST).
 3. It is contended by counsel for the petitioner that petitioner
imported goods worth Rs.108 crores in the year 2018. The first
import was on 24.05.2018. Goods were exempted from tax subject to the condition that the products made from the goods
were to be exported within a period of eighteen months. It is
contended that the period of eighteen months have not expired till
date. It is also contended that on special reasons being shown the
period of export was extended by a period of six months and after
period of six months to be extended on special conditions. It is
contended that no notice for assessment was even issued by the
authorities. A fire took place in the factory of the petitioner on
03.09.2018 which was reported to the police and fire brigade.
 4. It is also contended that petitioner was arrested on
07.06.2019. Charge-sheet has been filed. In the charge-sheet
details of E-way bills and Outward E-way bills are given from
which it is revealed that total Inward supplies were to the tune of
Rs.133 crores and the Outward supplies were to the tune of Rs.32
crores. It is contended that charge-sheet discloses different
hands. At one place, the E-way supply is shown as Rs.143 crores,
whereas at a different paragraph, the E-way supply is shown as
Rs.133 crores. It is contended that Department has shown two
Inward supplies to E-way bills and has come to the conclusion that
there is an evasion of tax of about Rs.25 crores, whereas from the
E-way bills generated, it is revealed that only Inward supply was
to the tune of Rs.133 crores out of which Rs.108 crores goods
were imported by the petitioner which was exempted and for
which a bond was executed by the petitioner. The said bond as per
the Foreign Trade Policy and the exemptions given, the period of
export was to expire in November, 2019. It is contended that
petitioner is a status holder as per Para-3.20 of the Foreign Trade
Policy and he falls in the status category of One-Star Export House.
 5. It is also contended that the factory of the petitioner is
attached by the Department and Bankruptcy proceedings have
been initiated and Resolution Professional has been nominated
and he has taken over the charge of the factory. It is also
contended that where tax evaded is less than Rs.5 crores the
offence is bailable. It is also contended that petitioner was a
Director in the Company and the other Co-Directors-father and
wife of petitioner have not been charge-sheeted by the
Department.
 6. Counsel for the petitioner has placed reliance on “M/S.
Jayachand Alloys (P) Ltd. vs. Commissioner of Gst, Writ
Petition No.5501/2019, decided by Madras High Court on
04.04.2019.”
 7. Reliance has also been placed on “Gaurav Kumar
Aanchaliya vs. Union of India decided by Rajasthan High
Court in S.B. Criminal Misc. Bail Application No.3624/2019
on 13.05.2019” and “Pradeep vs. Commissioner of GST &amp;
Central Excise Selam &amp; Anr., Special Leave to Appeal (Crl.)
No(s).6834/2019, decided by Apex Court on 06.08.2019.”
 8. Learned counsel appearing on behalf of Commercial Tax
Department has vehemently opposed the second bail application.
It is contended that at the premises of the factory, the stock was
found and physical verification was only worth about Rs.2 crores.
There was thus a deficit of stock to the tune of Rs.101 crores. It is
contended that petitioner has sold the goods without generating
the Outward supply invoice and has thus evaded tax to the tune of
Rs.18 crores.
 9. It is also contended that the total evasion of tax is to the
tune of Rs.25 crores, hence, petitioner is not entitled to grant of
bail. It is also contended that petitioner has imported the goods
but has not exported the goods, hence, he has evaded the tax and
customs duty. It is argued that the import was worth Rs.108
crores and export was only to the tune of rupees three crore fifty
five lac, thus petitioner has evaded tax.
 10. I have considered the contentions.
 11. The offence as alleged in the FIR is under Sections 132(1)(a)
read with Section 132(1)(h), (j) and (k) of the Rajasthan Goods
and Services Act, 2017, the maximum sentence provided under
Section 132(a)(i) is five years. From the E-way bills produced with
the charge-sheet, it is revealed that the total Inward supply was
to the tune of Rs.133 crores which included the import of Rs.108
crores made by the petitioner. The total Outward supply was to
the tune of Rs.32 crores. Since the total Outward supply other
than the goods imported by the petitioner is concerned is only to
the tune of Rs.25 crore. Tax on the import would become payable
only after the expiry of 18 months. Tax on the remaining amount
is fall below Rs.5 crore. Deposit of Rs.2.5 crore is already lying
with the Authorities.
 12. In the charge-sheet itself, the report of fire made to the
police and the fire brigade is also available which goes to show
that fire took place in the factory premises of the petitioner.
Petitioner has already furnished the bond with regard to import of
Rs.108 crores and in case the export is not made within eighteen
months, he is liable to pay in accordance with bond executed by
him. Petitioner has remained in custody for a period of more than
five months. No notice with regard to tax outstanding has ever
been issued to the petitioner.
 13. In view of the same and judgments cited by counsel for the
petitioner, I deem it proper to allow the second bail application.
 14. This second bail application is accordingly allowed and it is
directed that accused petitioner shall be released on bail provided
he furnishes a personal bond in the sum of Rs.10,00,000/-
(Rupees Ten Lac only) together with two sureties in the sum of
Rs.5,00,000/- (Rupees Five Lac only) each to the satisfaction of
the learned trial court with the stipulation that he shall appear
before that Court and any court to which the matter is transferred,
on all subsequent dates of hearing and as and when called upon to
do so.
 15. Petitioner is directed to deposit the Passport with the trial
Court and will not be entitled to leave the country without seeking
prior permission of the trial Court. 
 (PANKAJ BHANDARI),J

1. Petitioner has filed this second bail application under Section
439 of Cr.P.C.
 2. Criminal Case No.143/2019, pending before the Chief
Metropolitan Magistrate, Jaipur (Economic Offence Court) having
case No.J/C (ADM.)/Alwar,2018-19/379 for offence under Sections
132(1)(a) read with Section 132(1)(h), (j) and (k) of the
Rajasthan Goods and Services Act, 2017 (RGST).
 3. It is contended by counsel for the petitioner that petitioner
imported goods worth Rs.108 crores in the year 2018. The first
import was on 24.05.2018. Goods were exempted from tax subject to the condition that the products made from the goods
were to be exported within a period of eighteen months. It is
contended that the period of eighteen months have not expired till
date. It is also contended that on special reasons being shown the
period of export was extended by a period of six months and after
period of six months to be extended on special conditions. It is
contended that no notice for assessment was even issued by the
authorities. A fire took place in the factory of the petitioner on
03.09.2018 which was reported to the police and fire brigade.
 4. It is also contended that petitioner was arrested on
07.06.2019. Charge-sheet has been filed. In the charge-sheet
details of E-way bills and Outward E-way bills are given from
which it is revealed that total Inward supplies were to the tune of
Rs.133 crores and the Outward supplies were to the tune of Rs.32
crores. It is contended that charge-sheet discloses different
hands. At one place, the E-way supply is shown as Rs.143 crores,
whereas at a different paragraph, the E-way supply is shown as
Rs.133 crores. It is contended that Department has shown two
Inward supplies to E-way bills and has come to the conclusion that
there is an evasion of tax of about Rs.25 crores, whereas from the
E-way bills generated, it is revealed that only Inward supply was
to the tune of Rs.133 crores out of which Rs.108 crores goods
were imported by the petitioner which was exempted and for
which a bond was executed by the petitioner. The said bond as per
the Foreign Trade Policy and the exemptions given, the period of
export was to expire in November, 2019. It is contended that
petitioner is a status holder as per Para-3.20 of the Foreign Trade
Policy and he falls in the status category of One-Star Export House.
 5. It is also contended that the factory of the petitioner is
attached by the Department and Bankruptcy proceedings have
been initiated and Resolution Professional has been nominated
and he has taken over the charge of the factory. It is also
contended that where tax evaded is less than Rs.5 crores the
offence is bailable. It is also contended that petitioner was a
Director in the Company and the other Co-Directors-father and
wife of petitioner have not been charge-sheeted by the
Department.
 6. Counsel for the petitioner has placed reliance on “M/S.
Jayachand Alloys (P) Ltd. vs. Commissioner of Gst, Writ
Petition No.5501/2019, decided by Madras High Court on
04.04.2019.”
 7. Reliance has also been placed on “Gaurav Kumar
Aanchaliya vs. Union of India decided by Rajasthan High
Court in S.B. Criminal Misc. Bail Application No.3624/2019
on 13.05.2019” and “Pradeep vs. Commissioner of GST &
Central Excise Selam & Anr., Special Leave to Appeal (Crl.)
No(s).6834/2019, decided by Apex Court on 06.08.2019.”
 8. Learned counsel appearing on behalf of Commercial Tax
Department has vehemently opposed the second bail application.
It is contended that at the premises of the factory, the stock was
found and physical verification was only worth about Rs.2 crores.
There was thus a deficit of stock to the tune of Rs.101 crores. It is
contended that petitioner has sold the goods without generating
the Outward supply invoice and has thus evaded tax to the tune of
Rs.18 crores.
 9. It is also contended that the total evasion of tax is to the
tune of Rs.25 crores, hence, petitioner is not entitled to grant of
bail. It is also contended that petitioner has imported the goods
but has not exported the goods, hence, he has evaded the tax and
customs duty. It is argued that the import was worth Rs.108
crores and export was only to the tune of rupees three crore fifty
five lac, thus petitioner has evaded tax.
 10. I have considered the contentions.
 11. The offence as alleged in the FIR is under Sections 132(1)(a)
read with Section 132(1)(h), (j) and (k) of the Rajasthan Goods
and Services Act, 2017, the maximum sentence provided under
Section 132(a)(i) is five years. From the E-way bills produced with
the charge-sheet, it is revealed that the total Inward supply was
to the tune of Rs.133 crores which included the import of Rs.108
crores made by the petitioner. The total Outward supply was to
the tune of Rs.32 crores. Since the total Outward supply other
than the goods imported by the petitioner is concerned is only to
the tune of Rs.25 crore. Tax on the import would become payable
only after the expiry of 18 months. Tax on the remaining amount
is fall below Rs.5 crore. Deposit of Rs.2.5 crore is already lying
with the Authorities.
 12. In the charge-sheet itself, the report of fire made to the
police and the fire brigade is also available which goes to show
that fire took place in the factory premises of the petitioner.
Petitioner has already furnished the bond with regard to import of
Rs.108 crores and in case the export is not made within eighteen
months, he is liable to pay in accordance with bond executed by
him. Petitioner has remained in custody for a period of more than
five months. No notice with regard to tax outstanding has ever
been issued to the petitioner.
 13. In view of the same and judgments cited by counsel for the
petitioner, I deem it proper to allow the second bail application.
 14. This second bail application is accordingly allowed and it is
directed that accused petitioner shall be released on bail provided
he furnishes a personal bond in the sum of Rs.10,00,000/-
(Rupees Ten Lac only) together with two sureties in the sum of
Rs.5,00,000/- (Rupees Five Lac only) each to the satisfaction of
the learned trial court with the stipulation that he shall appear
before that Court and any court to which the matter is transferred,
on all subsequent dates of hearing and as and when called upon to
do so.
 15. Petitioner is directed to deposit the Passport with the trial
Court and will not be entitled to leave the country without seeking
prior permission of the trial Court. 
 (PANKAJ BHANDARI),J

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Only after the expiry of previously stipulated time frame can assesse be held not exempt from tax liability. Bail application was allowed as per provisions of section 439 of the Code of Criminal Procedure, 1973 .