Facts of the Case

The applicants sought anticipatory bail in connection with an FIR registered at Meghwadi Police Station involving an alleged financial dispute relating to the supply of oil. The complainant had paid approximately ₹22 lakh for the transaction. According to the applicants, after the oil had already been loaded and all necessary documents had been prepared, the complainant cancelled the order. Since GST had already been deposited with the Government, the applicants contended that they were liable to refund only the amount remaining after deduction of GST.

During the hearing, both parties appeared before the Court. The complainant agreed to accept ₹18,76,697.68, being the balance amount after deduction of GST of ₹3,23,302.32, with the understanding that if the GST amount was subsequently refunded by the tax authorities, the same would also be passed on to the complainant.

Issues Involved

  1. Whether the applicants were entitled to anticipatory bail considering the settlement reached with the complainant.
  2. Whether custodial interrogation was necessary after the parties amicably resolved the monetary dispute.
  3. Whether the undertaking to refund the remaining amount and cooperate in obtaining GST refund justified grant of anticipatory bail.

Petitioners’ Arguments

  • The applicants submitted that the complainant himself cancelled the transaction after the goods had already been loaded and the required documentation had been completed.
  • They contended that GST amounting to ₹3,23,302.32 had already been deposited with the Government and therefore could not immediately be refunded.
  • The applicants undertook to refund ₹18,76,697.68 in two instalments.
  • They further assured the Court that if any GST refund was received in future, the same would be transferred to the complainant and they would not claim any right over such refund.
  • It was argued that in view of the settlement, custodial interrogation was unnecessary.

Respondent’s Arguments

  • The complainant accepted the applicants' proposal to receive ₹18,76,697.68 after deduction of GST.
  • The complainant requested that if the GST amount was later refunded by the authorities because the goods had not actually been delivered, the refunded amount should also be paid to him.
  • The complainant stated before the Court that upon receiving both instalments within the stipulated period, he would have no objection to quashing of the FIR.

Court Order / Findings

The Bombay High Court observed that the parties had voluntarily resolved the financial dispute in the presence of the Investigating Officer.

The Court further noted that:

  • The complainant had accepted the settlement proposal.
  • The applicants had undertaken to pay ₹18,76,697.68 in two instalments within the prescribed time.
  • The applicants had also undertaken to cooperate in obtaining GST refund and to transfer any refund received to the complainant.
  • The Investigating Officer expressly stated that custodial interrogation was not necessary.

Accordingly, the Court:

  • Allowed both anticipatory bail applications.
  • Directed release of both applicants on furnishing PR Bond of ₹25,000 each with one or two sureties.
  • Directed the applicants to cooperate with the investigation whenever called.
  • Restrained them from influencing witnesses or tampering with evidence.
  • Directed them to remain present before the trial court unless exempted.

Important Clarification

  • Settlement between the parties does not automatically result in quashing of the FIR; however, it is a relevant factor while considering anticipatory bail.
  • Payment of GST already deposited with the Government cannot ordinarily be refunded directly by the seller without following the statutory GST refund mechanism.
  • The Court considered the voluntary settlement and the absence of necessity for custodial interrogation while granting anticipatory bail.
  • The complainant retained liberty to pursue GST refund in accordance with law, with full cooperation from the applicants.

Sections Involved

  • Section 438, Code of Criminal Procedure, 1973 – Anticipatory Bail.
  • Relevant offences alleged in the FIR (not discussed in detail in the order).
  • GST refund principles were referred to only for settlement purposes; no finding was rendered on GST liability.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785564112_2497compressed.pdf  

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