Facts of the Case

The applicants, Rekha Vishwadeep Tiwari and Mehfooz Mehmood Khan, approached the Bombay High Court by filing anticipatory bail applications in connection with FIR No. 349/2022 registered at Meghwadi Police Station. The dispute arose from a commercial transaction involving the supply of oil valued at ₹22,00,000.

According to the applicants, the oil had already been loaded into the tanker and the necessary documentation had been completed. However, the complainant subsequently cancelled the order and sought a refund of the entire amount. The applicants contended that they had already deposited GST amounting to ₹3,23,302.32 with the Government and, therefore, only the balance amount was immediately refundable.

During the hearing, the applicants expressed their willingness to refund the balance amount after deducting the GST already deposited. The complainant accepted this proposal before the Court.

Issues Involved

  1. Whether anticipatory bail should be granted considering the commercial nature of the dispute.
  2. Whether custodial interrogation of the applicants was necessary.
  3. Whether settlement between the parties could be considered while deciding the anticipatory bail applications.
  4. Whether the GST component already deposited with the Government could be deducted from the refund amount.

Petitioner’s Arguments

The applicants submitted that:

  • The complainant himself cancelled the purchase order after the goods had been loaded and documentation completed.
  • GST of ₹3,23,302.32 had already been deposited with the Government through the applicant's business concern.
  • They were ready and willing to refund the remaining amount of ₹18,76,697.68.
  • The amount would be paid in two instalments within the time stipulated by the Court.
  • If GST refund became available in future, the applicants would fully cooperate and ensure that such refund was passed on to the complainant.
  • In view of the settlement and willingness to repay, custodial interrogation was unnecessary.

Respondent’s Arguments

The complainant submitted that:

  • Since the goods were never received, he was entitled to the refund of the entire consideration.
  • He agreed to accept the amount of ₹18,76,697.68, after deduction of GST already deposited by the applicants.
  • He requested that if the GST amount was subsequently refunded by the tax authorities, the same should also be paid to him.
  • The complainant further stated before the Court that upon receipt of both instalments within the agreed time, he would have no objection to quashing the FIR.

Court Order / Findings

The Bombay High Court observed that:

  • The parties had voluntarily arrived at an amicable settlement before the Court.
  • The complainant had accepted the applicants' proposal regarding refund.
  • The applicants undertook to pay ₹18,76,697.68 in two instalments within the specified dates.
  • The applicants also undertook to cooperate in obtaining GST refund, if permissible, and to ensure that such refund would ultimately reach the complainant.
  • The Investigating Officer specifically informed the Court that custodial interrogation was no longer necessary.
  • Considering the settlement and the facts of the case, the Court granted anticipatory bail to both applicants subject to appropriate conditions, including furnishing bail bonds, cooperation with investigation, non-interference with evidence, and regular attendance before the trial court.

Important Clarification

  • Settlement between parties in a commercial dispute can be a significant factor while considering anticipatory bail.
  • Where the Investigating Officer confirms that custodial interrogation is unnecessary, the Court may extend protection from arrest.
  • GST already deposited with the Government cannot automatically be refunded between private parties; the appropriate statutory refund process must be followed.
  • The Court recognised that any future GST refund, if sanctioned, should ultimately benefit the complainant in accordance with the undertaking given by the applicants.

Sections Involved

  • Section 438 of the Code of Criminal Procedure, 1973 (Anticipatory Bail) (corresponding provisions under the Bharatiya Nagarik Suraksha Sanhita may now apply prospectively where applicable).
  • FIR No. 349/2022 registered at Meghwadi Police Station (offences as per the FIR).

Link to Download the Order

https://mytaxexpert.co.in/uploads/1785561475_2457compressed.pdf   

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.