IMPORTANT POINT
The court emphasized the requirement of reasons to believe and sound reasons for arrest under Section 69 of the CGST Act, and the need to balance personal liberty with the seriousness of economic offences.

JUDGMENT :

1. Heard Shri Satish Chandra Mishra, learned Senior Counsel assisted by Shri Purnendu Chakravarty and Shri Mukesh Kumar Tewari, learned counsels for the applicant and Shri Dipak Seth, learned counsel appearing on behalf of Union of India and perused the record.

2. This bail application has been moved by the accused-applicant-Deepanshu Srivastava for grant of bail in Case Crime No. 316 of 2024, under Section 132 of Central Goods and Services Tax Act, 2017, Police Station DGGI, Lucknow Zonal Unit, District Lucknow, during trial.

3. Learned Senior Counsel appearing for the accused-applicant while pressing the bail application submits that the applicant has been falsely implicated in this case and without any sufficient reasons and basis and without assessing any tax liability the applicant has been arrested and detained in prison since 02.02.2024.

4. While drawing the attention of this Court on Sections 69, 73, 74 and 79 as well as Section 62 of the Central Goods and Services Tax Act, it is vehemently submitted that at first the department is required to assess the tax liability to be paid by an assesse and it is only thereafter any proceeding under Section 69 of the Central Goods and Services Tax Act with regard to the arrest of the accused person or assesse may be undertaken. It is vehemently submitted that till date no tax liability is shown to have been assessed by the department and without there being any sufficient or cogent reasons he has been placed behind the bars.

5. While drawing the attention of this Court towards the arrest-memo, a copy of which has been placed at Page No.23 of the paper book, it is vehemently submitted that no grounds have been shown in this arrest-memo which may justify the arrest of the applicant and a vague language has been used in the arrest memo in order to show that the provisions of the Central Goods and Services Tax Act, 2017 have been violated without specifying the alleged act or omission of the applicant.

6. It is also submitted that the applicant was detained in illegal custody for three days from 30.01.2024 till 02.02.2024 by the department and thereafter he has been challaned.

7. It is further submitted that no notice has either been given under Section 74 of the G.S.T. Act and when the applicant was presented before the remand court, the offences were shown as bailable but subsequently without there being any basis many other companies have been shown to be associated with the applicant as shell companies with which the applicant is not having any connection or concern.

8. While drawing the attention of this Court towards the 'panchnama/recovery-memo', with regard to Shalimar Mannat, Barabanki, it is stated that the recovery, as shown by the department from this house is not having any significance in the eye of law as the same has not been made in presence of the applicant and no signature of applicant has been obtained on this recovery-memo and, thus, the same is barred by Section 100 of the Cr.P.C.

9. It is also submitted that no incriminating article has been recovered from the premises of applicant and statement of some persons are shown to have been recorded by the department under duress with regard to the formation of some shell companies by the applicant in order to evade tax liability.

10. It is vehemently submitted that applicant is languishing in jail in this case since 02.02.2024 and while producing the applicant before the Magistrate after his illegal arrest, the department has requested for judicial remand and no custody remand was requested, which primafacie reflect that further detention of the applicant is not required by the investigating agency and despite the investigation is complete, the complaint is not being filed deliberately to deny the facility of bail to the applicant. The alleged offences against the applicant are punishable with maximum imprisonment of five years and as the investigation has almost completed, the detention of the applicant is not req