Facts of the Case

  • The petitioner, Ajit Singh Shekhawat, son of Shri Guman Singh Shekhawat, aged about 57 years and a resident of Jhotwara, Jaipur, was confined at Central Jail, Jaipur.
  • The case arose out of an investigation conducted by the Office of the Principal Commissioner, Central Goods and Services Tax (CGST), Jaipur (PS), under File/FIR No. IV(06)115/AE/JPR/2020.
  • The primary allegation levied against the applicant involved active participation in the misappropriation of Goods and Services Tax (GST) through the contravention of statutory provisions.
  • The applicant was apprehended by the enforcement authorities and had been continuously languishing in judicial custody since December 15, 2021.
  • Following the culmination of statutory procedures, the investigation of the case was declared fully completed by the probe agency, and the charge sheet/relevant records were prepared.

Issues Involved

  • Whether the petitioner was legally entitled to the grant of regular bail under Section 439 of the Cr.P.C. for alleged economic offenses under Sections 132(1)(b) and (c) read with Section 132(1)(i) of the CGST Act, 2017.
  • Whether the prolonged pre-trial detention of the applicant was judicially justifiable when the statutory investigation stood fully completed and the maximum prescribed punishment for the offense was capped at five years.
  • Whether the denial of bail by a Co-ordinate Bench in a purportedly identical matter, which was subsequently left undisturbed by the Supreme Court, operated as an absolute bar against exercising discretionary powers to grant bail in the present application.

Petitioner’s Arguments

  • The learned counsel representing the applicant, Mr. S.S. Hora, submitted that the applicant has an unblemished record with no criminal antecedents prior to the registration of this case.
  • It was strongly emphasized that the applicant had already undergone a substantial period of incarceration, having been detained in custody since December 15, 2021.
  • Counsel highlighted that the offenses alleged against the petitioner carry a maximum statutory imprisonment term of five years and are exclusively triable by a Judicial Magistrate of the First Class.
  • It was further argued that since the investigation of the entire case stood fully completed, there was absolutely no risk of tampering with the prosecution evidence or influencing witnesses.
  • The petitioner’s counsel concluded that since there was no realistic chance of an early commencement or swift conclusion of the trial, no fruitful purpose would be served by further detaining the applicant in prison.

Respondent’s Arguments

  • The prayer for regular bail was vehemently opposed by Mr. Kinshuk Jain, learned Special Public Prosecutor (SPP) appearing on behalf of the Union of India.
  • The respondent contended that the economic gravity of the offense involving the misappropriation of public revenue under the CGST Act warranted a strict approach against the grant of liberty.
  • The primary legal objection raised by the Revenue was that in an identical factual situation involving a similar offense, a Co-ordinate Bench of the Rajasthan High Court had previously refused to grant bail to an accused.
  • The SPP further pointed out that the said order of refusal passed by the Co-ordinate Bench was subsequently challenged but was not interfered with by the Hon’ble Supreme Court of India, thereby establishing a persuasive precedent against releasing the applicant.

Court Order / Findings

  • The Single Bench of Hon’ble Mr. Justice Birendra Kumar observed that the fundamental cornerstone of criminal jurisprudence dictates that "bail is the rule and refusal is the exception".
  • The Court determined that the prosecution/respondent failed to provide any cogent, compelling, or exceptional reason to justify the continued incarceration and refusal of bail to the applicant.
  • Recognizing the completed state of the investigation and the statutory limits of the trial, the High Court allowed the Criminal Miscellaneous Bail Application and directed that the accused-applicant, Ajit Singh Shekhawat, be released on regular bail.
  • The release was made conditional upon the applicant not being wanted in any other case, and subject to furnishing a personal bond of Rs. 20,000/- along with two distinct sureties of Rs. 10,000/- each to the absolute satisfaction of the learned trial court.
  • The Court imposed strict conditions to safeguard the trial process:
    1. The applicant must extend full and unconditional cooperation during the trial proceedings, failing which the trial judge is granted explicit liberty to cancel the bail bonds.
    2. The applicant is strictly prohibited from leaving the country without obtaining prior permission from the competent Court; any breach would constitute deliberate disobedience and trigger immediate cancellation of bail.

Important Clarification

  • The Primacy of Personal Liberty Over Co-ordinate Bench Refusals: The ruling clarifies that a previous bail rejection by a Co-ordinate Bench—even if left untouched by the Supreme Court—does not strip away the discretionary power of a court to grant bail under Section 439 CrPC if individual circumstances (such as a completed investigation, lack of criminal history, and prolonged custody) meet the legal thresholds of justice. Economic allegations alone cannot automatically override the foundational liberty doctrine that "bail is rule and refusal is exception" when no cogent grounds for continuous detention exist.

Section Involved

  • Section 439 of the Code of Criminal Procedure, 1973 (Cr.P.C.): Provisions governing the special powers of the High Court or Court of Session regarding the grant of regular bail.
  • Section 132(1)(b) of the Central Goods and Services Tax (CGST) Act, 2017: Offense related to issuing an invoice or bill without the supply of goods or services or both, leading to wrongful availing or utilization of input tax credit or evasion of tax.
  • Section 132(1)(c) of the CGST Act, 2017: Offense related to availing input tax credit using an invoice or bill issued without actual supply.
  • Section 132(1)(i) of the Central Goods and Services Tax (CGST) Act, 2017: Specifies the punishment parameters (imprisonment up to 5 years and a fine) based on the financial threshold of tax evasion or wrongful utilization of input tax credit.

Link to download the order - https://mytaxexpert.co.in/uploads/1782981966_297compressed.pdf

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