Taxpayer cannot be detained for indefinite period for alleged tax evasion where investigation is pending

Last updated: 08 February 2022

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Quick Summary

The Supreme Court has ruled that an individual accused of tax evasion cannot be detained indefinitely, especially when the investigation is ongoing and the maximum potential sentence is limited. In this case, the accused had already spent 25 months in custody, which was nearly half of the maximum five-year sentence. The court granted bail, emphasising that prolonged detention without a completed investigation is unjust.

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court of India in Paresh Nathalal Chauhan v. The State of Gujarat & Anr. [SLP (Crl) No. 009458 - 009459/2021, Criminal Appeal Nos.164-165/2022 dated February 01, 2022] granted bail to a person accused of tax evasion. Held that, the assessee cannot be detained for an indefinite period of time when the maximum sentence for such offence is 5 years and investigation w.r.t. the same is still pending.

Citation :
SLP (Crl) No. 009458 - 009459/2021, Criminal Appeal Nos.164-165/2022 dated February 01, 2022

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