Bail Condition to deposit INR 70 Lakhs for alleged wrongful availment of ITC is not sustainable

Last updated: 28 January 2023

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court in the matter of Subhash Chouhan v. Union of India [Criminal Appeal No. 186 /2023 dated January 20, 2023] set aside the condition imposed by the Hon'ble Chhattisgarh High Court, of depositing an amount of INR 70,00,000/- for grant of bail to the assessee, in a matter of wrongful availment of Input Tax Credit ("ITC").

Citation :
Criminal Appeal No. 186 /2023 dated January 20, 2023

The Hon'ble Supreme Court in the matter of Subhash Chouhan v. Union of India [Criminal Appeal No. 186 /2023 dated January 20, 2023]set aside the condition imposed by the Hon'ble Chhattisgarh High Court, of depositing an amount of INR 70,00,000/- for grant of bail to the assessee, in a matter of wrongful availment of Input Tax Credit ("ITC").

Facts

Subhash Chouhan ("the Appellant") was arrested on October 27, 2021 for alleged wrongful availment of INR 6,95,32,472/- as ITCby procuring invoices from fake and fictitious firm and also supplied goods without payment of tax and without issuing invoices to the tune of INR 27,70,559/-.

The Hon'ble Chhattisgarh High Court vide order date June 21, 2022 ("theImpugned Order")granted bail to the Appellant subject to certain conditions. One of the conditions was that the Appellant shall deposit a sum of INR 70,00,000/- in favour of the Revenue Department within 45 days from the date of release.

The Appellant contended that the condition to deposit INR 70,00,000/- for bail is not sustainable. Further, the final assessment was not complete so the Appellant cannot be presumed to be under the legal liability to pay such amount.

Issue

Whether the condition to deposit INR 70,00,000/- as a pre-requisite to grant bail is sustainable?

Held

The Hon'ble Supreme Court in Criminal Appeal No. 186 /2023 held as under:

Observed that, such a condition cannot beimposed while granting bail.
Held that, the condition directing the Appellant to deposit a sum of INR 70,00,000/- is not sustainable.
Set aside the condition to deposit such sum of INR 70,00,000/-.
Sustained rest of the conditions in the Impugned Order.