Gujarat High Court Upholds Bail, Dismisses Application for Cancellation Due to GST Ledger Compliance
Court finds no breach of bail conditions as the respondent deposited the required amount within the stipulated time, dismissing technical objections raised by the petitioner.
In a significant ruling, the Gujarat High Court dismissed an application seeking the cancellation of bail granted to Virbhadrasinh Pratapsinh Chauhan, who was accused of non-compliance with bail conditions related to a deposit in the electronic cash ledger under GST provisions. The court, presided over by Mr. Divyesh A. Joshi, concluded that the respondent had adhered to the conditions imposed, thereby rejecting the petition filed by the Superintendent (AE) of Central GST & Central Excise, Gandhinagar.
The petitioner argued that the respondent failed to debit the deposited amount from the electronic cash ledger through Form GST DRC-03, thereby breaching the bail conditions. However, the court found that the respondent had deposited Rs. 90 lakhs, as required, into the Government account within the stipulated timeframe. The court emphasized that once the amount is credited to the Government's account, the tax liability is considered discharged, addressing any apprehensions of misuse with an undertaking from the respondent not to claim a refund or use the amount.
The court referred to the statutory provisions under Section 49 of the Central Goods and Services Tax Act, 2017, and the precedent set in Arya Cotton Industries v. Union of India, affirming that the tax liability stands discharged upon credit to the Government's account, subject to adjustments during return filing.
The judgment underscored that mere technicalities without a substantial breach of conditions cannot justify bail cancellation. The court concluded that the respondent had fully complied with the terms and conditions, and thus, the application for bail cancellation lacked merit.
Bottom Line:
Bail cannot be canceled solely on the ground that the amount deposited in the electronic cash ledger was not debited through Form GST DRC-03, as the respondent has complied with the terms of deposit within the stipulated time, and such amount is credited into the Government account.
Statutory provision(s): Criminal Procedure Code, 1973 Section 439(2), Central Goods and Services Tax Act, 2017 Section 49.
