ORDER

Shukla, J. -- 1. Hearing convened through video conferencing.

2. This is the first bail application filed under section 439 of the Code of Criminal Procedure [for short “the CrPC”] on behalf of the applicants, namely, Jagdish Arora and Ajay Kumar Arora, who have been taken into judicial custody in connection with Crime No.DGGI/BhZU/1204/03/2020-21/SDPL, registered at the Central Goods and Service Tax, Bhopal, in respect of the offence punishable under section 132(1)(a) read with section 132(1)(i) of the Central Goods and Service Tax Act, 2017 [hereinafter referred to as “the CGST Act”].

3. The bail application preferred by the applicants under section 437 of the CrPC before the learned Judicial Magistrate First Class, Bhopal, was rejected on 14-7-2020. Thereafter, they moved an application before the Court of Sessions under section 439 of the CrPC, which also faced dismissal vide impugned order dated 16.7.2020.

4. Shorn of unnecessary details : the factual expose’ adumbrated in a nutshell, are that the applicants were taken into custody by the Central Goods and Service Tax Department (CGST Department) on 7.7.2020, while their formal arrest was shown on 8.7.2020 under section 69 of the CGST Act, and they have been in jail since 9.7.2020. The instant case arises out of proceedings initiated by the CGST Department in relation to purported evasion of Goods and Service Tax (GST) by the Company Som Distilleries Pvt. Ltd. [hereinafter referred to as “SDPL”] purportedly leviable and evaded on account of production and sale of sanitizers.

5. At the outset, the petitioners claimed that neither Jagdish Arora nor Ajay Kumar Arora, the applicants herein, are Directors/ Managers/Officers/employees or authorized representatives of the SDPL and as such, they are not responsible for the day-to-day business affairs of the Company. In fact, both the applicants had resigned their Directorship from the SDPL on 1.4.2009, i.e. nearly 11 years ago. A certified copy of Form-32 having the details of resignation from the Directorships is appended to the application as Annexure-P/3. It is asserted that the CGST Department, however, has not collected or placed on record even an iota of documentary evidence in order to substantiate their version. It is strenuously urged that the applicants are entitled to bail on this ground alone.

6. It is putforth that initially the GST authorities had communicated that the demand of GST liability was made to the extent of 7,96,00,000/-Thus, in order to demonstrate its bona fide the SDPL immediately deposited ¹ 8 crores under protest. According to the petitioners the CGST Department has now increased the purported liability to¹ 33 crores as an afterthought.

7. It is argued that the instant arrest proceedings are completely premature, as till date the assessment proceedings have not commenced and, therefore, there is no concretized liability that the GST Department can fasten on the SDPL. To bolster the submission, reliance is placed on the decisions of the High Court of Madras in the case of M. Jayachandran Alloys Pvt. Ltd. v. Superintendent of GST and Central Excise W.P. No.5501/2019 and the Delhi High Court in Make My Trip (MMT) v. Union of India, 2016 (44) STR 481 (Delhi), confirmed by the Supreme Court in the judgment rendered in the case of Akhil Krishan Maggu and another v. Deputy Director, DGGI and Ors CWP. No. 24195/2019 (OM).

8. It is stated on behalf of the applicants that the SDPL is a private limited company which was incorporated in the year 1986 under the provisions of the Companies Act, 1956. The SDPL is engaged in the business of manufacture and sale of alcohol based products and has made its mark across the country, primarily on account of consistently and uniformly manufacturing high quality products. It is a significant and honest contributor towards the Government exchequer and contri