Allahabad High Court refuses anticipatory bail plea of trader since it’s a bailable offence

The Allahabad High Court has said that an application for anticipatory bail under Section 438 CrPC can be invoked by a person who has a “reason to believe that he may be arrested” for committing a “non-bailable offence”.

The anticipatory bail application under Section 438 of the Code of Criminal Procedure, 1973 has been filed by the applicants M/s V.K. Traders/ applicant No 1 and Vipin Kumar/ applicant No 2 (added as an applicant in pursuance of order dated 25.11.2021 of the court) before the Court directly without approaching the Sessions Judge with the following prayer:-

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“It is, therefore most respectfully prayed that the Court may graciously be pleased to allow this application and grant anticipatory bail to the applicant under Section 132(1)(a)(b)(c)(d)(i) of the Central Goods and Service Tax Act, otherwise applicant shall suffer irreparable loss and injury. And/or pass such other further order which the Court may deem fit and proper in the circumstances of the case.”

Counsel for the applicants has stated that the dispute in the matter relates to an amount of Rs 1,80,86,343 which is stated to be prima facie availed by M/s V.K Traders as an inadmissible Input Tax Credit (ITC).

It is argued that the applicant no 1 (M/s V.K. Traders) is the proprietorship firm of which the applicant no 2 (Vipin Kumar) is the sole proprietor.

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It is further argued that the counter affidavit it has specifically been mentioned that all the offences in which tax evasion is less than Rs 5 crore remain bailable and only most grave offences involving tax evasion above Rs 5 crore have been made non-bailable and cognizable offences and, as such, the amount in the present dispute is much less than Rs 5 crore, and, hence the offences are bailable. It is also argued that as such the applicant is entitled to be granted anticipatory bail.

Per contra, Counsel appearing for the opposite party no 3 (Directorate General, Goods and Services Tax Intelligence, Meerut Zonal Unit) opposed the prayer for anticipatory bail and argued that the anticipatory bail application under Section 438 Cr.P.C is not maintainable inasmuch as the amount involved, which has been availed by M/s V.K. Traders and is an inadmissible Input Tax Credit is Rs 1,80,86,343 which is much less than the amount which would make the offence non-bailable and cognizable.

The Court without going into the merits of the case proceeds to examine the following question which arises before it for its adjudication :

“Whether an application under Section 438 Cr.P.C would lie and is maintainable for an offence which has been declared by the concerned statute as a bailable offence?”

The Court said,

The provision of anticipatory bail as per its scheme can be invoked by a person who has a “reason to believe that he may be arrested” for committing a “non-bailable offence”.

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The Court held that, for entertaining an application under Section 438 CrPC, there are two requirements as contemplated in its Clause (1), which are as follows:

(i) There must be an accusation of the petitioner having committed a non bailable offence. Obviously, this accusation must be an existing one or in any case stemming from the facts already in existence.

(ii) There must be reasonable apprehension or belief in the mind of the petitioner that he would be arrested on the basis of such an accusation.

The simultaneous existence of both these conditions is a sine qua non for invoking courts jurisdiction. When the said two requirements are fulfilled, the High Court or the Court of Sessions could entertain an application for anticipatory bail and then consider it on its own merit.

In the case, it is a common ground between the applicants and the opposite party No 3 that the offences are available.

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“Resultantly, the question thus being answered by holding that granting of anticipatory bail does not arise for an offence which is bailable and a direction for the same can be issued only in respect of non-bailable and cognizable offences, the anticipatory bail application deserves rejection,” the Court observed while rejecting the anticipatory bail application.