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2025 DAILYLAW 53642 (CAL)

SHASHI CHOUDHURY v. THE UNION OF INDIA

CRM(R)/53/2025 · 2025-09-04

Prasenjit Biswas

body2025

Judgment text

Extracted from the PDF above. The PDF is authoritative.

04.9.2025 Sl.2 Samarpita Court No.4 CALCUTTA HIGH COURT IN THE CIRCUIT BENCH AT JALPAIGURI CRM (R) 53 of 2025 In Re: An application for bail under Section 483 of the BNSS, 2023 corresponding to Section 439 of the Code of Criminal Procedure, 1973 in connection with C.R. Case No.1196 of 2025, dated 03.07.2025 under Section 132(1)(c) of the CGST Act, punishable under the section of 132(2)/132(5) of the Central Goods and Services Tax Act,2017 Act. In the Matter of: Shashi Kumar Choudhary …. Petitioner Mr. Sekhar Kumar Basu, Ld. Sr. Adv. (V.C.) Mr. Moyukh Mukherjee, Ms. Sagnika Banerjee, Mr. Diwash Gupta .. for the Applicant/Petitioner Mr. Ratan Banik, Mr. Bishwa Raj Agarwal, Mr. Saptarshi Banik …. For the respondents 1. The present application under Section 438 of the Bharatiya Nagarik Suraksha Sanhita, 2023, has been filed by the applicant/accused petitioner seeking bail in connection with C.R. Case No. 1196 of 2025, initiated under Section 132(1)(c) of the CGST Act. 2. The allegation against the applicant/petitioner is that the present petitioner has committed offence under Section 132(1)(I)of the CGST Act by evading CGST liability to the tune of approximately Rs.100,000,000/- (Ten Crores) which is stated to be punishable under the section of 132(2)/ 132(5) of the CGST Act. 3. Mr. Sekhar Kumar Basu, learned Senior Advocate, appeared in this case through virtual mode. Mr. Moyukh Mukherjee, learned Advocate 2 for the petitioner/accused has said that the present petitioner is completely innocent and has been falsely arraigned with the crime. It is urged that the alleged liability is purely a matter of assessment/adjudication under the CGST Act and no further custodial interrogation is required. It is further contended by the learned Advocate thatthe present petitioner was remanded to the judicial custody on 7.8.2025 and since then he is in custody. 4. It is further stated by Mr. Mukherjee that the present petitioner had already extended full cooperation with the authorities and necessary documents and statements have been provided to the concerned authority and nothing was recovered from him for which he may be connected with the alleged offence. 5. It is said by the learned Advocate that the compliance of Section 41A/35(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) has not been complied with in this case. It is said by the learned Advocate that the entire case is rested purely on documentary evidences such as returns, invoices, e-way bills and accounts which have already been ceased by the department. So, there is no justification for detaining the accused petitioner further behind the bar. 6. In support of his contention, learned Advocate relied upon the decisions rendered by the Hon‟ble Apex Court as well as the Co- ordinate Bench of this Court.The attention of this Court is drawn to 3 the decision rendered by the Hon‟ble Apex Court reported in (2023) 20 SCC 315 (State of Gujrat &Ors.-vs. Choodamani Parmeswaaran Iyer & Anr.) and the another decision of the Co-ordinate Bench of this Court passed in connection with the case being CRM (R) 47 of 2025 (Gopal Rathi). 7. It is said by the learned Advocate that in the case of Choodamani Parameshwaran Iyer(supra) the Hon‟ble Apex Court has held that if a person has committed a cognizable and nonbailable offence warranting his arrest, then the safe guardsbetween arresting a person as provided in Section 41 and 41A Cr.P.C. may have to be kept in mind.It is said by the learned Advocate thatthe mandatory provision of Section 41A of Cr.P.C./ 35(3) of BNSS has not apparently been complied with by the authority concerned and that non-compliance obviously vitiated the arrest of the accused person in connection with this case. 8. So, it is said by the learned Advocate that no further custodial interrogation of this accused petitioner is required and he may be enlarged on bail. 9. Mr. Ratan Banik, Learned Counsel for the Union of India opposes the bail application on the ground of seriousness of economic offence and submits that huge loss of revenue has been caused to the Government exchequer. It is further contended by the learned Advocate that the present petitioner has made fraudulent transaction and availed ITC 4 without receipt of any goods and he had continued activities of availing and passing over the fake ITC. although arrested earlier by DGGI, Guwahati in the month of June, 2025. 10. It is further contended by the learned Advocate that the present petitioner was actively involved in the illegal activities and he was the main accused in this fake transactions and unauthorizedly and illegally availed ITC to the tune of Rs. Rs.100,000,000/- (Ten Crores) with such fraudulent transactions. 11. It is further assailed by the learned Advocate that there are sufficient materials in the record which reflect about prima facie involvement of this accused with the alleged offence. In counter to the submission made by the learned Counsel for the petitioner, learned Advocate draws the attention of this Court to the provision of Section 69 of the CGST Act and said that as per said provision Commissioner has reason to believe that a person has committed an offence specified under Section 132 of CGST Act. The authority held that there are sufficient reasonsfor coming to the conclusion that there is „reason to believe‟ in the matter of arrest of this accused petitioner. In support of his contention learned Advocate has relied upon the decision rendered by the High Court of Telangana reported in (2019) SCC Online TS 3332 (P.V. Ramana Reddy -Vs.- Union of India & Ors.) andfurtherreliance has been made by the learned Advocate upon a decision passed by this Co-ordinate Bench of this Court reported in 5 2020Supreme (Cal) 150 (Arvind Kumar Munka -vs.- Union of India) and said that in the case of economic offence gravity of the said offence should be considered. This attention was drawn to another decision rendered by the Hon‟ble Apex Court in case of Y.S. Jagan Mohan Reddy –Vs- Central Bureau of Investigation (2013) 7 SCC 439 stating inter alia that the case of economic offence should be dealt with in different way as the economic offence having deep rooted conspiracies and involving huge loss of public funds that needs to be viewed seriously as it possess serious threat to the financial backbone of the country. 12. I have considered the rival submissions advanced by both the parties and perused the materials on record as well as have gone through the decisions cited on behalf of both the parties. 13. It is noted that this accused is in custody since 7.8.2025, and the maximum punishment prescribed for which this petitioner was booked is imprisonment up to five years. 14. Section 69 of the Central Goods and Services Tax Act, 2017 vests the Commissioner with the power to authorise the arrest of a person if he has “reasons to believe” that such person has committed specified offences under the Act which are punishable with imprisonment. However, this statutory empowerment cannot be read in isolation; it must be exercised in consonance with the broader constitutional and statutory safeguards governing personal liberty and arrest, particularly those embodied in the Code of Criminal Procedure, 1973 (Cr.P.C), and now the Bharatiya Nagarik Suraksha Sanhita, 2023 6 (BNSS). The Commissioner must record his “reasons to believe” that the person has committed the specified offences. Such belief must be based on credible material, not mere suspicion. 15. In this case it is admitted position that no notice under Section 41A of Cr.P.C or Section 35(3) of BNSS has been served. The provision of Section 69 of the CGST Act empowers the commissioner‟s reason to believe must be objective, justiciable and consistent with the constitutional safe guardsas provided under Article 21. Section 69 vests the Commissioner with the power to authorize the arrest of a person if he has “reason to believe” that such person has committed specified offences under the Act which are punishable with imprisonment. However, the said statutory empowerment cannot be read in isolation, it must be exercised in consonancewith the broaderconstitutional and statutory safe guardsgoverning personal liberty and arrest, particularly, those embodied in the Code of Criminal Procedure, 1973 and now BNSS, 2023.The Section provides that commissioner must record his reasons to believethat the person has committed the specified offences and such believe must be based on credible material and not mere suspension. 16. It is stated by the learned Advocate of the Union of India that the reasons has been specified by the authority concerned and came to a conclusion that this accused petitioner has committed the alleged offences.On the other hand, it is the contention of the learned Advocate for the petitioner that arrest memo supplied to the petitioner 7 contains fake allegations and do not disclose concrete reasons to believe. 17. It appears that this petitioner in compliance with the notice sent to him he either appeared before the authority or took time for appearance before the authority concerned. This accused petitionerwas arrested on 7.8.2025 when he appeared before the authority Section 41A Cr.P.C. (now Section 35(3) BNSS, 2023) was introduced as a reformative measure to curb the abuse of arrest powers and to ensure that arrest is not made in a routine or mechanical manner. The provision mandates that in all cases where arrest is not necessary under the parameters laid down in Section 41 Cr.P.C, the police officer (or the authorised investigating officer) shall issue a notice of appearance to the accused, directing him to appear before the authority for investigation. If the person complies with such notice, he shall not ordinarily be arrested unless further grounds emerge. Even though Section 69 CGST Act is a special provision, the exercise of arrest power therein must align with the procedure of Cr.P.C./BNSS, particularly Sections 41 and 41A Cr.P.C. (or Section 35(3) BNSS). Thus, if the situation does not warrant immediate arrest, the person must be served with a notice of appearance before any coercive step is taken. 18. In this regard learned Advocate for the union of India has referred a decision rendered Hon‟ble High Court of Judicature at Madras in case 8 ofSenior Intelligence Officer, DCG-Vs- M Premraja (CRL.OP No. 26116 of 2023) andsaid that Section 69 of the CGST Act is akin to Section 41 of the Code of Criminal Procedure or 35(3) of BNSS, 2023. 19. In Choodamani Parmeswaaran Iyer (Supra) the Hon‟ble Apex Court has held at paragraph no. 42 that if a person committed a cognizable and non bailable offence warranting his arrest, then the safe guards before arrest as provided under Section 41A Cr.P.C. may have to be kept in mind. 20. It is said that the petitioner has already extended his cooperation with the authorities and necessary documents have already been handed over to the authority concerned. Section 41A Cr.P.C. (now Section 35(3) BNSS, 2023) was introduced as a reformative measure to curb the abuse of arrest powers and to ensure that arrest is not made in a routine or mechanical manner. The provision mandates that in all cases where arrest is not necessary under the parameters laid down in Section 41ACrPC, the police officer (or the authorised investigating officer) shall issue a notice of appearanceto the accused, directing him to appear before the authority for investigation. If the person complies with such notice, he shall not ordinarily be arrested unless further grounds emerge. Even though Section 69 of the CGST Act is a special provision, the exercise of arrest power therein must align with the procedure of Cr.P.C./BNSS, particularly Sections 41 and 41A Cr.P.C. (or Section 35(3) BNSS). Thus, if the situation does not warrant 9 immediate arrest, the person must be served with a notice of appearance before any coercive step is taken. 21. Anyway, this petitioner is in custody since for a considerable period of time and I find that there would be no justification for keeping this accusedbehind the bar for sake of custodial interrogation on the above referred facts and circumstances. 22. In view of above the petitioner namely, Shashi Choudhury, shall be released on bail upon furnishing a bond of Rs.1,00,000/- (Rupees one lakh) with two sureties of Rs.50,000/- of like amount each subject to the satisfaction of the Additional Chief Judicial Magistrate, Siliguri and subject to the conditions that he shall appear before the Trial Court on every date of hearing until further orders and shall not intimidate witnesses or tamper with evidence in any manner whatsoever. This petitioner is further directed to meet the Investigating Officer once in a week until further order and with a further direction that he should deposit his Passport before the concerned Investigating Officer until further orders. 23. In the event of any violation of the conditions enumerated in the preceding paragraph, the learned Additional Chief Judicial Magistrate, Siliguri or the learned Trial Court shall be at liberty to cancel the petitioner‟s bail in accordance with law, without any further reference to this Court. 24. Accordingly, the criminal appeal being CRM (R) 53 of 2025 is allowed. 10 25. Urgent Photostat certified copy of this order may be supplied to the parties expeditiously, if applied for. (Prasenjit Biswas, J.)