New Delhi: The Supreme Court bench comprising Justices Krishna Murari and Ahsanuddin Amanullah, on April 19, set aside a Gujarat high court order imposing a precondition of furnishing bank guarantee by an accused seeking bail. In Makhijani Pushpak Harish vs The State of Gujarat, the appellant-accused was arrested on the basis of complaint filed by the Superintendent (Prevention) of Central GST and Central Excise, Vadodara, for the offences punishable under Sections 69, 132(1)(a) of the Central Goods and Services Act, 2017 (CGST). The appellant made an application under Section 437 of the Code of Criminal Procedure, 1973 (CrPC) for seeking bail before the court of Chief Judicial Magistrate, Vadodara. The bail was granted subject to the condition that the appellant submits a bank guarantee of an amount of Rs 3 crores along with certain other conditions. Thereafter, the appellant came to know that he had to deposit 110% amount of fixed deposit bank guarantee, in order to furnish bank guarantee of Rs.3 crore, which he found it impossible to arrange. Aggrieved by the necessity of a pre-deposit to secure bail, the appellant first approached the Additional Sessions Judge, Vadodara, for the deletion of the condition to provide a bank guarantee of Rs 3 crore till the final disposal of the case, which was imposed by the CJM. However, the Sessions Court confirmed the CJM’s order, and rejected his application on January 2. Also read: Bail Conditions Should Be Relaxed if Bail Bonds Not Furnished in a Month: Supreme CourtThen, he approached the Gujarat high court seeking relief. The appellant argued that granting bail with this onerous condition virtually amounted to disallowing bail. However, as he was ready and willing to provide bank guarantee of Rs 1.5 crore within a reasonable period of time, the high court had on January 12, modified the condition by reducing the bank guarantee to Rs.1.5 crore. This, the high court said, had to be furnished before the CJM, Vadodara, within two months. On April 19, the Supreme Court recalled that in a number of cases, the court had found the condition of pre-deposit for grant of bail to be bad. In Subhash Chouhan vs Union of India, the Supreme Court had on January 20 set aside the order passed by the high court imposing a condition of deposit while granting bail to the appellant. The challenge in this appeal had been made to the order dated June 21, 2022, passed by the high court of Chhattisgarh, granting bail to the appellant subject to conditions. One of the conditions was that the appellant shall deposit a sum of Rs 70 lakhs under protest, in favour of the Principal Commissioner, CGST, Raipur, within a period of 45 days from the date of his release. The appellant submitted that the condition is not sustainable as the First Information Report against him was in the respect of him wrongfully availing himself of input tax credit of Rs.6,95,32,472. He added that there is no final assessment in this regard under the GST Act, and hence, it could not be presumed that he was under a legal liability to pay the amount. The Supreme Court, in this case, also recorded the view of the Additional Solicitor General, K.M. Nataraj, appearing for the Union of India/State, that such a condition could not be imposed while granting bail.The bench of Justices Krishna Murari and B.V. Nagarathna had, in this case, set aside the high court order imposing the condition on the appellant to deposit a sum of Rs.70 lakhs for grant of bail. Similar caseIn another case decided by the Krishna Murari-Ahsanuddin Amanullah bench on February 17, (Anatbhai Ashokbhai Shah vs State of Gujarat) the facts were almost identical, and no reason was found to deviate from the view taken earlier. The bench, in this case, set aside the Gujarat high court’s order imposing a precondition directing the appellant to deposit a sum of Rs 2 crores. In this case, the appellant had filed regular bail application under Section 439 CrPC for the offences punishable under certain provisions of the GST Act, 2017 and CGST Act, 2017, read with Sections 21 and 120B of the IPC. After the subordinate courts refused to grant him bail, he approached the Gujarat high court for relief. The allegation was that the appellant, engaged in the business of trading of ferrous waste and scape, indulged in fraudulent transfer of input tax credit and evasion of a huge amount of GST. The appellant denied the allegations, and argued that his arrest was against the guidelines issued by the finance department and considering the scheme and object of the Act, prosecution should normally be launched only after adjudication is completed. Justice Ilesh J. Vora of the Gujarat high court, recording the willingness of the appellant to deposit Rs 2 crore within six months from his release, also noted that the department failed to point out why further custody of the appellant was necessary. He also observed that the entire case was based on documentary evidence and the same was in the custody of the department. Yet, Justice Vora was inclined to release the appellant on bail with a condition that he should deposit Rs 2 crores before the office of the Assistant Commissioner of State Tax, Unit-5, Ahmedabad, within a period of six months in equal six instalments. Repetitions of such orders by the high courts imposing unsustainable preconditions for grant of bail have made observers wonder whether the Supreme Court should frame suitable guidelines to be followed by the lower courts, while considering grant of bail to accused in pending cases.
