Kerala High Court Rejects Bail in ₹6.14 Crore Tax Evasion Case, Citing Seriousness of Allegations

In a significant legal development, the Kerala High Court has denied bail to a petitioner accused of tax evasion amounting to ₹6.14 crores under the Kerala State Goods and Service Act, 2017. The judgment, delivered by Justice Mohammed Nias C.P., has underscored the gravity of the allegations and the importance of continuing the investigation without interference.

The court’s decision was based on a thorough analysis of the case. The petitioner, a wholesale distributor of mobile accessories and electronic items, was alleged to have supplied goods without issuing invoices, thereby evading tax payments dating back to 2018. The arrest followed a raid on the petitioner’s office on November 9, 2023.

One of the key legal points addressed by the court was the timing of the arrest in relation to the assessment proceedings. The petitioner’s counsel argued that the arrest could only occur after the completion of the assessment. However, the court rejected this argument, stating, “The power to arrest under Section 69 can be invoked if the Commissioner has a reason to believe that the person has committed offences that are prescribed and which are punishable under Section 132 of the CGST Act, 2017.”

The court further emphasized the need to prevent potential tampering with evidence or influencing witnesses, stating, “If it is to ensure a proper investigation and prevent the possibility of tampering with evidence or intimidating or influencing the witnesses, the power can certainly be exercised.”

Ultimately, the court found that the allegations of tax evasion, amounting to more than ₹6.5 crores, were serious and warranted a thorough investigation. Therefore, it denied bail to the petitioner at this stage.

Date of Decision: 12th December 2023

BADHA RAM VS INTELLIGENCE OFFICER