The Liberty of a person is of utmost importance but not at the cost of Sovereign function.

The Liberty of a person is of utmost importance but not at the cost of Sovereign function.?When personal Liberty is pitted against a sovereign function, i.e. collection of tax which is the economy's lifeblood, the latter will prevail.

Case Title: Sushil Kumar vs the State of Punjab

Court/Authority: HIGH COURT OF PUNJAB & HARYANA

Case Number: CRM-M-28841-2020

Order Dated: 22-Sep-2020

Compiled by: Abhishek Raja Ram & Team GSTpanacea

Mobile No.: 9810638155 / 7503031378

Email ID: [email protected]

Summary of the Case:

Vigilance Bureau received information that the owner of a transport company had been indulging in tax evasion in connivance with officers/officials of the Excise and Taxation Department.?

The tax was being evaded by ensuring that there was no checking or verification of documents or goods. At the same time, being transported to and from the State of Punjab, and heavy monthly amounts were being paid as bribes to officers and officials of the taxation department.

Twelve officers including the petitioner had been named in their respective FIR.

Apprehending arrest, the petitioner moved the petition under section 438 of Cr. P.C. for grant of anticipatory bail, which was rejected. There was alleged connivance of transporters and officials to facilitate evasion of tax.

On behalf of the State, it is contended that the names of 12 officers figured in the FIR and the petitioner has been specifically named. Further that during the investigation, Shiv Kumar munshi of Som Nath, made a disclosure statement whereby the register was seized. The register maintained contains details of amounts paid to Excise and Taxation Officers/officials. As per register, Rs. 8,25,000/-was given to the petitioner for the period 13-10-2017 to 20-7-2020. It is submitted that matter is still under investigation and the files dealt with by the petitioner were inspected. It was found that trucks detained by him were not dealt with as per the statute, the number of them being let off by imposing a minor fine without making any physical verification. In some cases, the penalty to be imposed by the Assistant Excise and Taxation Commissioner was imposed by the petitioner and the vehicle was released without there being any penalty order. It has come to the light that some of the cash penalty recovered was not deposited in the Government Treasury. During the investigating, it surfaced that there are no entries of detained vehicles maintained for the period January, 2020 to April, 2020. In some cases in spite of original bills being there on file, minor penalties were imposed by the petitioner on the ground that goods were not accompanied by bills. It is submitted that these instances indicate that the petitioner was hand in glove with the passers and transporters. The submission is that the collection of GST at the State level has dropped. The evasion of tax is by the connivance of transporters, officers/officials of Excise and Taxation Department and the passers, if it is not checked or taken seriously, the tax regime under GST would crash. (para 5)

The in-roads of the passer Pawan Kumar in the Excise and Taxation Department is evident from the arguments raised by counsel for the petitioner that Pawan Kumar though not an employee of the Excise and Taxation Department but was being used by various officers as a Driver when the regular drivers were not available. Yet there appears no occasion for such a person to make 40 calls to the petitioner on his mobile number. The contention that the petitioner was not on active duty from January, 2020 to March, 2020 is of no avail, the vigilance bureau considered the details pertaining to the last one year. (para 13)

Since discrepancies were found in files even minor penalties imposed and recovered by the petitioner were not deposited with Government, the arrest was imperative for a fair and full investigation and, thus, application for Anticipatory Bail is rejected.?

There is no quibble that the Liberty of a person is of utmost importance. But when personal Liberty is pitted against a sovereign function i.e. collection of tax which is the lifeblood of the economy, the latter would prevail. The present is a case where the arrest is imperative for a fair and full investigation. The official position of the petitioner can be used to influence witnesses or tamper with evidence. (para 15)

Considering the complexity of the issue, the tax impact on the chain of sellers and purchasers, the material as on date with the investigating agency, the multidimensional aspects involved which need a deeper probe, no case is made out for grant of pre-arrest bail. (para 16)

Thanks & Regards

Abhishek Raja Ram

9810638155 / [email protected]