Research › Search › Judgment

Gujarat High Court · body

2016 DIGILAW 1329 (GUJ)

Dewanand Bhagirath Gupta v. State of Gujarat

2016-07-15

G.B.SHAH

body2016
JUDGMENT : G.B. Shah, J. 1. Rule. Learned Addl. Public Prosecutor, Mr. K.L. Pandya for the respondent No. 1 and learned advocate, Mr. Hriday Buch for the respondent No. 2 waive service of notice of rule. 2. This Criminal Revision Application has been filed by the applicant under section 394 read with section 401 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the Code" for short) to set aside order dated 11/9/2014 passed in Criminal Misc. Application No. 875 of 2014 by the learned Additional Sessions Judge, Vadodara, whereby the bail granted to the applicant was cancelled. 3. Short undisputed facts are that a complaint was filed against the applicant, who is the proprietor of M/s. Steel Engineering Services, inter alia alleging that the said company had not paid the service tax to the tune of Rs. 1.80 crores on the amount received from clients with regard to various services, erection and commissioning provided. Said complaint was numbered as Central Excise Case No. F.No.IV/6-Prev/16/Gr.G/2014 before the Court of learned Chief Judicial Magistrate, Vadodara. In pursuance of said complaint, the applicant was arrested. The applicant thereafter preferred application for bail before the learned Magistrate. As the said application was rejected, he approached for bail before the learned Sessions Court at Vadodara by way of filing Criminal Misc. Application No. 338 of 2014. However, said application was allowed vide order dated 28/2/2014 with certain conditions namely, 2(b) that the applicant shall deposit 30% of the total outstanding amount within a period of two months from his release on bail, 2(c) the applicant shall thereafter deposit 10% of the outstanding amount every month till the total amount is paid to the authority and 2(h) the applicant shall not l State of Gujarat without prior permission of the trial court. As the applicant could not comply with the conditions of paying the amount, he preferred an application being Criminal Misc. Application No. 641 of 2014 for modification of the conditions. During the pendency and hearing of said application, condition 2(h) was modified and applicant was permitted to leave State of Gujarat to collect the amount in order to comply with condition 2(b). Thereafter, the application was partly allowed vide order dated 1/5/2014 whereby condition 2(b) was rejected while condition 2(h) was suspended for a further period of two months. He, therefore, approached this Court by way of filing Criminal Misc. Thereafter, the application was partly allowed vide order dated 1/5/2014 whereby condition 2(b) was rejected while condition 2(h) was suspended for a further period of two months. He, therefore, approached this Court by way of filing Criminal Misc. Application No. 6662 of 2014, which was permitted to be withdrawn as the prescribed time of two months for payment of 30% as per condition 2(b) had expired. The applicant also preferred another application before the Sessions Court being Criminal Misc. Application No. 635 of 2014 to modify condition 2(c) of the order qua deposit of 10% of outstanding amount every month, which was pending for disposal at the time of filing of the present application. As the applicant failed to comply with the conditions of paying the outstanding amount as per the order dated 28/2/2014 passed in Criminal Misc. Application No. 338 of 2014 by the learned 4th Additional Sessions Judge, Vadodara, the present respondent No. 2-original complainant filed an application being Criminal Misc. Application No. 875 of 2014 for cancellation of bail before the Sessions Court. Upon hearing the learned advocates appearing for the parties, said application was allowed vide [order dated 11/9/2014 passed by the learned Addl. Sessions Judge, Vadodara, whereby the bail granted to the present applicant was cancelled, which is giving rise to the present Criminal Revision Application. 4. Heard Mr. Umesh A. Trivedi, learned advocate for the applicant, Mr. K.L. Pandya, learned APP for the respondent No. 1 and Mr. Hriday Buch, learned advocate for the respondent No. 2. 5. Mr. Umesh Trivedi, learned advocate for the applicant submitted that the applicant had paid Rs. 20,00,000/- at the time of releasing him on bail and thereafter, an amount of Rs. 10,00,000/- was paid to the department. He further submitted that one of the companies has directly paid an amount of Rs. 12,00,000/- to the department pursuant to issuance of notice under section 87 of the Act and thereafter, many other companies have paid amounts directly to the department, however, as he had failed to recover substantial amount from firms like Essar Projects, Shapoorji Pallonji Limited and I.V.R.C.L., he could not clear the outstanding amount. He further submitted that even though the applicant was permitted to go out of Gujarat for recovery purpose by modifying the condition, as the time to deposit the amount was not extended, the interim relief extended to the applicant became redundant. He further submitted that even though the applicant was permitted to go out of Gujarat for recovery purpose by modifying the condition, as the time to deposit the amount was not extended, the interim relief extended to the applicant became redundant. He further submitted that on the one hand, no order was passed on the application for modification filed by the applicant and on the other hand, bail granted to the applicant was cancelled by the impugned order and therefore, the applicant could not pay the outstanding amount. He further submitted that the applicant has given an advertisement in the newspapers to sell off his house and he will pay off all the outstanding amount upon sale of the said house and therefore, he prayed to set aside the order dated 11/9/2014 passed by the Sessions Court in Criminal Misc. Application No. 875 of 2014. 6. Mr. Hriday Buch, learned advocate for the respondent No. 2, submitted that the applicant was arrested for the offence under section 89(1)(d)(ii) of the Finance Act, 1994 as he failed to discharge the burden of service tax to the tune of Rs. 1.80 crores during the periods 2010-11, 2011-12, 2012-13 and 2013-14 to the Government. He further submitted that during the hearing of bail application filed by the applicant before the learned Sessions Judge, Vadodara, as it was submitted by the learned advocate appearing for the applicant that the applicant is ready and willing to deposit the amount of service tax with the authority, the applicant was released on bail on certain conditions including the conditions to deposit 30% of the amount within a period of two months of his release, to deposit 10% of the outstanding amount till the due amount of tax is wholly paid and also not to leave the State of Gujarat without prior permission of the trial court. He further submitted that although the applicant deposited Rs. 20,00,000/- to get him released on bail, he did not comply with the condition of depositing further payment of Rs. 54,00,000/- by 5/5/2014 and Rs. 18,00,000/- by 5th of each month starting from June, 2014 and to frustrate the conditions of bail, he filed Criminal Misc. He further submitted that although the applicant deposited Rs. 20,00,000/- to get him released on bail, he did not comply with the condition of depositing further payment of Rs. 54,00,000/- by 5/5/2014 and Rs. 18,00,000/- by 5th of each month starting from June, 2014 and to frustrate the conditions of bail, he filed Criminal Misc. Application No. 641 of 2014 which was partly allowed permitting the applicant to go out of Gujarat to make payment and to comply with the conditions but, as the applicant did not deposit 30% of the total outstanding amount, Criminal Misc. Application No. 851 of 2014 was filed by the respondent No. 2 for cancellation of bail which was allowed by the impugned order. It was pointed out by Mr. Buch that the applicant had filed Criminal Misc. Application No. 6662 of 2014 for modification of condition 2(b) of the order dated 28/2/2014 passed in Criminal Misc. Application No. 338 of 2014 and to grant further time of two months in paying 30% of the outstanding amount. Therein, he also sought interim relief restraining the respondent No. 2 from taking any coercive action against the applicant without joining the respondent No. 2 in the said application wherein ex-parte ad-interim relief was granted and therefore, the respondent No. 2 filed Criminal Misc. Application No. 8673 of 2014 in Criminal Misc. Application No. 6662 of 2014 for joining the department as party which was allowed and thereafter, when the main Criminal Misc. Application No. 6662 of 2014 came up for hearing, it was withdrawn by the applicant. He further submitted that application being Criminal Misc. Application No. 1635 of 2014 filed for modification of condition No. 2(c) of the order to deposit 10% of the amount every month was also rejected by the learned Additional Sessions Judge, Vadodara, vide order dated 16/10/2014. He further submitted that as the applicant did not pay the outstanding amount of Rs. 57,22,912/-, he was issued with a show cause notice as to why penal action should not be taken against him, but he did not reply to the said notice. He pointed out that the applicant had floated another company in the name of M/s. DHJ Engineering Technology Pvt. Ltd. in which 99% share holding is of the applicant and 1% is of his wife. He pointed out that the applicant had floated another company in the name of M/s. DHJ Engineering Technology Pvt. Ltd. in which 99% share holding is of the applicant and 1% is of his wife. He further submitted that the department has recently noticed that the applicant had provided taxable services to the tune of Rs. 2.45 crores during the periods 2012-13 to 2013-14 and although the applicant was liable to pay service tax to the tune of Rs. 30,61,489/-, he had paid only Rs. 2,33,446/- towards the same and the summons issued to the applicant remain present on 1/5/2014, 12/5/2014 and 27/5/2014 at the department were returned with the endorsement as not delivered and therefore, notice was effected by affixing at the last known address by drawing panchnama on 17/4/2015. He further submitted that in view of the conduct of the applicant in evading payment of service tax to the public exchequer and in view of non-cooperation of the applicant in investigation, he has urged that present revision application deserves to be dismissed. 7. This Court has gone through the impugned order of cancellation of bail passed by the learned Additional Sessions Judge, Vadodara and has also considered the submissions made by the learned advocates for the parties. 8. It has been argued by learned advocate for the applicant that on and from 10.5.2013, offence under section 89(1)(d)(ii) of the Finance Act has been inserted to be cognizable and punishment has been enhanced from three years to seven years and made the offence non-bailable. Thus, on and from 10.5.2013 if a person has collected any amount as service tax but failed to pay the amount so collected to the Central Government and if it exceeds Rs. 50.00 lakhs, then only the accused will be liable for punishment upto seven years. Drawing attention of this Court to the break-up of service tax liability shown by the Department for the period 2013-2014 till 31.12.2014, service tax liability even assessed by the Department was Rs. 30,32,939/- only and thus, no provision under section 89(1)(d)(ii) of the Act could have been resorted to by the authority. He then submitted that thus when it does not fall within that provision automatically, an offence becomes bailable and punishment would be upto one year only, even if the accused is alleged to have committed such offence. 30,32,939/- only and thus, no provision under section 89(1)(d)(ii) of the Act could have been resorted to by the authority. He then submitted that thus when it does not fall within that provision automatically, an offence becomes bailable and punishment would be upto one year only, even if the accused is alleged to have committed such offence. He then submitted that strict interpretation of the Statute itself makes the offence alleged against the applicant to be bailable and therefore, even if the advocate on behalf of the applicant-accused had made any concession of even depositing the entire dues, it is ignorance of law and the same is not binding on the accused. In light of the above submissions, I have carefully perused the grounds (A) to (F) made in para 4 of the memo of this application as well as the impugned order dated 11.9.2014 passed by the learned additional Sessions Judge below Exh.9 in Criminal Misc. Application No. 875 of 2014. The said Criminal Misc. Application No. 875 of 2014 was preferred by the Superintendent, Central Excise, Customs and Service Tax, Vadodara-II under section 439(2) of the Code for cancellation of bail, as the conditions imposed by the court had not been fulfilled by the applicant herein. While deciding Criminal Misc. Application No. 338 of 2014 filed by the applicant herein under section 439 of the Code, the conditions were imposed by the 4th Additional Sessions Judge, Vadodara, vide order dated 28.2.2014. As submitted by learned advocate for the applicant, offence under section 89(1)(d)(ii) of the Act inserted has been cognizable and punishment has been enhanced from 3 years to 7 years on and from 10.5.2013. Thus, when the above referred order dated 28.2.2014 was passed in 'Criminal Misc. Application No. 338 of 2014 by the court and when the order dated 11.9.2014 was passed in Criminal Misc. Thus, when the above referred order dated 28.2.2014 was passed in 'Criminal Misc. Application No. 338 of 2014 by the court and when the order dated 11.9.2014 was passed in Criminal Misc. Application No. 875 of 2014, above legal position was very much there and not a whisper about the same has been made by learned advocate for the applicant herein and now when the respondent No. 2 had preferred application under section 439(2) of the Code, in which the trial court had decided the issue related to cancellation of bail, as breach of conditions was alleged to have been committed by the applicant, then in present revision, he cannot raise said new grounds for the first time and it is well settled legal position that ignorance of law that too by an advocate is not a good ground. 8.1. The learned advocate for the respondent No. 2 submitted that grounds mentioned in para 4(A) to 4(F) of the memo of this application in challenging the impugned order dated 11.9.2014 passed in Criminal Misc. Application No. 875 of 2014 cancelling bail of the applicant are not germane to the facts of the present case and the impugned order cannot be revised by this Court on the basis of such grounds because the impugned order of cancelling bail had been passed by the learned Sessions Judge for not complying with bail conditions of the applicant and the said grounds referred above are beyond the scope of the subject proceedings and not capable of being considered while deciding the present application. It is important to note that if at all initial partial payment had been made to come out of jail, it cannot be said to be compliance of bail conditions by the applicant and thus, learned Additional Sessions Judge had passed impugned order which is legal and proper and it does not warrant any interference in exercise of revisional jurisdiction more particularly when it is noticed that by one way or the other, the applicant is prolonging the time with calculative move just not to pay the amount which had prima facie appears to have been pocketed. It is also to be noted that the interim order passed by this Court dated 26.10.2015 in this Criminal Revision Application No. 566 of 2014 has also not been complied with. It is also to be noted that the interim order passed by this Court dated 26.10.2015 in this Criminal Revision Application No. 566 of 2014 has also not been complied with. Under the circumstances, no leniency can be shown to such an applicant who only desires to prolong the issue. Hence, this revision application deserves to be dismissed. 8.2. This revision application is accordingly dismissed. Rule is discharged. FURTHER ORDER After pronouncement of the aforesaid judgment, Mr. Umesh A. Trivedi, learned advocate for the applicant has requested for extension of order dated 6.5.2016 passed by this Court for a further period of eight weeks, as he wants to challenge this judgment before the higher forum. Mr. Hriday Buch, learned advocate for the respondent No. 2 has objection for the same. It may be noted that as the matter was kept as C.A.V. on conclusion of submissions on 6.5.2016 and as the summer vacation started from 7.5.2016, order dated 6.5.2016 has been passed in the said peculiar circumstances. Under the circumstances, request made by learned advocate for the applicant is rejected.