Breaking News SC grants interim bail to woman in economic offence

SC grants interim bail to woman in economic offence


New Delhi, Apr 22 (ILNS) The Supreme Court today granted interim bail to a woman accused in economic offence under different Sections of the Central Goods and Services Tax (CGST) Act.

A Bench of Justices Uday Umesh Lalit and KM Joseph issued notice on the plea, with an undertaking from the petitioner not to create any third party right over the firm properties and to pay Rs one crore by May 10, 2021.

The accused, Chhaya Devi, proprietor of M/s Prabhat Jarda Factory Overseas, was charged under Sections 132(1)(1) and 132(1)(b) r/w 132(1)(i) of the CGST Act. She challenged the dismissal of her bail by the Allahabad High Court in the matter. 

The former Attorney General of India, Senior Advocate Mukul Rohtagi, along with Advocate on Record Raj Kamal and Advocate Rohan Jaitley appeared before the Supreme Court on behalf of the petitioner.

Earlier, the high court had remarked: “The offence alleged against the applicant is economic offence in which the evasion of duty amounting Rs 62,10,28,165 is made against the applicant. Although the offence is punishable with imprisonment of five years yet the evasion of huge amounts of duty is a great loss to the government exchequer. As such the alleged offence is economic.”

The applicant submitted that she is the proprietor of M/s Prabhat Jarda Factory Overseas, while business of the firm is being managed by the manager and is in effective control of the manager. The applicant cannot be made vicariously liable. Only duty which was payable was about Rs.3.85 crore. If the figure of Rs.9.39 crore and Rs.43.10 crore is removed, then, out of the alleged figure Rs.56.43 crore, only a duty of about Rs.3.85 crores are due to be payable. To which the high court had held that, “Admittedly in the case in hand the applicant is the proprietor of the company and is responsible to the company for conduct of the business of the company, even if the business is being managed by the so-called manager.”

The counsel of the applicant had relied on Siddharam Satlingappa Mhetra Vs. State of Maharashtra and others (2011) which talks about the liberty of an individual, to which the court held that, “Personal liberty is very precious fundamental right and it should be curtailed only when it becomes imperative according to the peculiar facts and circumstances of the case.”

The applicant complains that she was arrested in the month of January this year on the basis of order passed by Principal commissioner, CGST, Noida and before arresting the applicant no proper assessment of the duty was made and no opportunity of hearing was given to the applicant, during investigation whether the alleged duty was due on her part or not.

Further the applicant reveals that the principal commissioner, CGST, Noida had not made any endorsement regarding the necessity of the arrest. Out of the alleged seized goods, the admitted duty which was payable by the applicant’s firm Rs 3.53 crores. The rest figures are imaginary and assumptive. Apart from applicant’s firm there are three other concerns with the name of Prabhat Zarda India Private Ltd., Prabhat Zarda International and Prabhat Zarda factory, which all run in the market and have common suppliers and transporters and as such to bring the entire burden of any documents or slips or register in the name of Prabhat Zarda cannot be attributed to be applicant or her firm.

In view of search conducted by the officials of GST department, which establishes that the applicant, proprietor of M/s Prabhat Jarda Factory Overseas has violated the provisions of Section 132(1)(a) to (h) of CGST Act, 2017 and therefore, M/s Prabhat Jarda Factory Overseas, E-37, Sector-8, Noida, on account of clandestine removal of finished goods without issuance of any invoice, without payment of any applicable duties, have evaded duties amounting Rs.62,10,28,165 which is more than Rs.5,00,00,000.



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