ORDER :

This is an application filed under Section 439 of the Code of Criminal Procedure seeking regular bail.

2. Petitioner is the sole accused in crime file No.GST/INS-7/2023 registered based on the complaint of the 1st respondent under Section 132(1) of the Kerala State Goods and Service Act, 2017.

3. The gist of the prosecution case is as follows:-Petitioner is the accused in the above crime registered based on the complaint of the 1st respondent under Section 132(1) of the Kerala State Goods and Service Act, 2017. The accused is a dealer under the GST Act. He has two offices, one at Pulimoodu Junction, Kottayam and the additional business place at Kochar Road, Pazhavangadi, Trivandrum. He is a wholesale distributor of mobile accessories and electronic items, which are taxable with 18% GST. It is alleged that he is supplying goods without issuing invoices, evading the tax payment due from 2018 onwards. The accused is involved in tax evasion estimated at 6.14 crores. A raid was conducted in the office of the accused on 09.11.2023, and he was arrested on 13.11.2023.

4. The learned counsel for the petitioner, Sri. Manilal, submits that the petitioner is a registered dealer regularly paying returns from 2018 to 2023. The 1 st respondent wrongly included the income of two other concerns conducted by the petitioner’s brother’s sons, who have separate GST registrations. The total income had been arrived at by wrongly taking the income of all three concerns. The 1st respondent has already seized documents, electronic records and other accompanying material, so further custodial interrogation is not necessary. The remand report does not state that continued custody of the petitioner is necessary. There is no scope for influencing the witnesses as they are officials. The petitioner is innocent and has not committed any offence. All the transactions are done based on invoices and bills, and all the transactions are recorded in the computer that was seized during the search. Hence, he prayed for the release of the petitioner on bail.

5. The learned counsel for the petitioner further argues that going by the provisions of GST, particularly Section 132, it has to be seen that the power of arrest can be invoked only after an assessment is made and not before. He relied on the judgment of the Madras High Court reported in Jayachandran Alloys (P) Ltd. v. Superintendent of GST & C. Ex., Salem [MANU/TN/3348/2019] and that of the Madhya Pradesh High Court reported in Jagdish Arora and others v. Union of India [MANU/MP/1035/2020] in this regard. It is also argued that custody of the petitioner was given for five days. After that, permission has been granted to interrogate the petitioner in jail for four days. Under such circumstances, since the investigation has progressed, there is no necessity for continued detention. He also argues that the entire hard copies of the documents found on the computer were already taken.

6. The learned Special Government Pleader, Taxes, Sri. Mohamed Rafiq, opposing the bail application, filed a report with the following contentions. An extensive investigation in the field of mobile phone accessories and electronics in the search conducted has unearthed a significant case of tax evasion by the accused herein being the proprietor of M/s. Lakshmi Mobile Accessories. The enquiry revealed that he supplied goods without issuing invoices, evading tax due to the government exchequer. It was revealed that he was involved in large-scale tax evasion by suppressing his actual outward taxable supplies. Based on the permission of the Joint Commissioner, a search was conducted at the residence and place of business, which revealed huge tax evasion. Mr. Rafiq submitted that a search was conducted on 9.11.2023, and the primary materials revealed that there was an evasion of more than Rs.6 crores. Only after the investigation is completed can the exact liability be quantified. It is also pointed out that between his arrest and th