Service Tax - Arrest - Applicant accused of collecting and not paying ST of Rs. 2.2 Cr - Conditional bail granted on undertaking that the entire amount will be paid in three months - HC
BY an application under Section 439 of the Code of Criminal Procedure, 1973, the applicant who has been arrested in connection with the offence punishable under Section 89 read with Section 90 of the Finance Act, 1994, has prayed for his release on bail.
The Senior Advocate appearing on behalf of the applicant submits that out of Rs.2.17 crores, the applicant has deposited Rs. 87,60,475/- and only Rs. 1,29,86,207/- is outstanding. The applicant has also pleaded that he will deposit three post-dated cheques of Rs.43,28,736/- each and will pay the entire dues within three months.
The Advocate submitted that the applicant has deposited service tax regularly and he also deposited all the dues of service tax, in accordance with law. The applicant is in custody since 15-10-2013, therefore, he is not in a position to deposit service tax, which he has recovered. The Senior Advocate further submitted that an undertaking has been given that in case of any default, the conditional bail automatically be cancelled and the applicant will abide all the conditions imposed upon him.
On the other hand, the Standing Counsel for Central Excise and Customs opposed the bail and submitted that the applicant has evaded the liability to pay service tax, which he has recovered, and about more than Rs.4 crores of service tax is due against the applicant, which he is evading. This is not the case in which the applicant will recover his service tax and thereafter, he will deposit, but even as per the statement, the applicant has recovered Rs.2.17 crores as service tax for the State and he is keeping the same with him. The applicant is only a trustee of public money and he is under obligation to discharge the entrustment in accordance with law i.e. to deposit service tax immediately, which he has recovered from the parties. Withholding of service tax amounts to criminal misappropriation of State money.
The High Court observed, "Considering period of detention of the applicant, liability of the applicant, amount due against the applicant, grounds taken in the applications for conditional bail and undertaking, and offer of the applicant, it would be appropriate to provide one opportunity to the applicant in the light of his offer/ proposal."
Consequently, application for conditional bail/temporary bail to the applicant is partly allowed under following conditions: -
- If the applicant fulfills the condition/proposal and deposits three post dated cheques for payment of dues on 6-12-2013, 6-1-2014 and 6-2-2014 at the time of furnishing bail bond and furnishes a personal bond of Rs.50,00,000/- (Rupees fifty lakhs only) with two sureties of Rs.25,00,000/- (Rupees twenty five lakhs only) each to the satisfaction of the Chief Judicial Magistrate, Durg, he be released on conditional & temporary bail for a period of three months.
- The applicant shall not leave the territory of the State of Chhattisgarh without permission from the Chief Judicial Magistrate, Durg before payment of aforesaid dues.
- He shall fulfill the conditions mentioned in the undertaking.
- The applicant and the sureties shall affix their photographs along with authenticated copies of documents showing their competency. At the time of furnishing bail bond, the Chief Judicial Magistrate, Durg shall ensure the identity and competency of sureties.
- The applicant shall regularly appear before the court during the course of inquiry or trial. In case of breach of any condition and in case of two continuous defaults in appearance of the applicant before the court, this order shall automatically stand cancelled.