Bail Can’t Be Conditional On Part-Payment Of Tax Amount, Says Supreme Court

Till remaining evaluation of tax legal responsibility is completed, no quantity as restoration could be made a pre-condition for bail, the Supreme Courtroom has stated. In saying so, the apex court docket put aside a Chhattisgarh Excessive Courtroom order that required the accused to deposit Rs 70 lakh as a pre-condition for bail.

The case concerned alleged wrongful availment of enter tax credit score by Subhash Chouhan, who was arrested in October 2021. The Items and Companies Tax authorities stated that Chouhan claimed practically Rs 7 crore as enter tax credit score foundation invoices from faux and fictitious companies. It was additionally alleged that he was concerned in supplying items with out paying taxes and issuing invoices for such gross sales. 

Chouhan’s counsel approached the Chhattisgarh Excessive Courtroom searching for his bail. Due process, the counsel argued, had not been adopted all through the investigation. Paperwork pertaining to Chouhan’s enterprise got to the authorities, however they weren’t checked out within the correct approach. The GST division’s investigation hasn’t been concluded though Chouhan has been in jail for 9 months, his counsel submitted. 

Happy with the arguments, the excessive court docket granted bail to Chouhan on fulfilment of sure situations. One in all which was depositing a sum of Rs 70 lakh in favour of the GST authorities inside a interval of 45 days from the date of his launch.

This explicit situation shaped the idea for attraction earlier than the Supreme Courtroom. 

His counsel stated that because the remaining evaluation in regards to the tax legal responsibility has not been accomplished, it can’t be presumed that the appellant is below a authorized legal responsibility to pay the quantity. By the way, the federal government’s counsel Further Solicitor Common KM Nataraj, too, submitted that such a situation can’t be imposed whereas granting bail. 

Consequently, the bench comprising Justices Krishna Murari and BV Nagarathna put aside the situation directing Chouhan to deposit Rs 70 lakh. 

The judgment of the Supreme Courtroom, in a approach, reiterates the authorized place in legislation that no quantity could be recovered except the evaluation is full and the due strategy of legislation is adopted by the tax authorities, stated Ritesh Kanodia, accomplice at ELP.


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