Venkateswara Rao Bolla And Another Versus The Senior Intelligence Officer, Directorate General of GST Intelligence Rep. by Spl. Public Prosectuor
Service Tax
2018 (3) TMI 1390 – TELANGANA & ANDHRA PRADESH HIGH COURT – 2020 (38) G. S. T. L. 581 (A. P.)
TELANGANA & ANDHRA PRADESH HIGH COURT – HC
Dated:- 12-3-2018
Criminal Petition Nos. 2283 and 2285 of 2018
Service Tax
T. Rajani, J.
\nFor the Petitioners : Mr. T. Nagarjuna Reddy
\nFor the Respondent : Mr. Anil Prasad Tiwari
\nORDER
\nThe condition, that the petitioners shall furnish bank guarantee for the remaining due amount, within ten days from the date of order of the Court below, imposed, while granting bail to the petitioners, is what is brought into question in the present criminal petitions.
\n2. Heard the counsel for the petitioners and Mr. Anil Prasad Tiwari, Special Public Prosecutor appearing for the respondent.
\n3. The facts of the case need to be briefly stated, in order to decide, to sustain or not to sust<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n service recipients but did not pay the same to the credit of the Central Government. Party verification was also done, which indicated that service consideration was paid by the recipients, inclusive of service tax. Hence, the petitioners were held liable for the offence under Section 89 of the Finance Act, 1994 (for short the Act). = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ourt and secondly, the petitioners showed the schedule of payment, in the memo dated 14.02.2018, submitted to the Special Court for Trial of Economic Offences. The petitioners were asked to offer their comments and the petitioners appended their signatures on the same along with date, as a token of having seen the memo; the contention of the petitioners that they are not avoiding the payment of service tax is false and misleading; the petitioners, vide statements dated 23.01.2018, recorded under Section 14 of the Central Excise Act, made applicable to service tax under Section 83 of the Act, accepted that service tax amounting to Rs. 4,05,77,984\/- and Rs. 2,16,89,832\/- respectively was collected by them, but they failed to credit to same to the Central Exchequer; the issue is not just a case of service tax evasion but a serious fraud of collecting service tax and failing to credit the same to the Central Exchequer beyond the period of six months from the date on which the said payment <\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Y v. BALWAN SINGH (2015) 7 SCC 373 wherein it was held that, for lawyers are perceived to be agents of their clients, the law of agency does not apply strictly to client-lawyer relationship; since lawyers also stand in a fiduciary relationship to their clients; their duties are more demanding than those imposed on other agents; as part of those duties, lawyers are required to respect the clients autonomy to make decisions in his matter; as a result thereof, though lawyers, without consulting their clients, can decide about tactics\/means to be adopted while dealing with cases, they should seek appropriate instructions from client or his authorized agent before making any concession\/statement\/admission\/settlement\/compromise before court which may, directly or remotely, affect the rightful legal right of the client; lawyers should follow the clients instructions rather than substitute their judgment for that of the client; as regards settlement\/compromise of a claim in court, a lawyer mus<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n in Section 73A (3) and (4) of the FA before going ahead with the arrest of a person under Sections 90 and 91 of the FA. The power of arrest is to be used with great circumspection and not casually. It is not to be straightway presumed by the DGCEI, without following the procedure under Section 73A (3) and (4) of the FA, that a person has collected service tax and retained such amount without depositing it to the credit of the Central Government. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n that the amount exceeds Rs. 50 lakhs (now enhanced to Rs. 1 crore) = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ount law of the land but it is the source and sustenance of all laws; the doctrine of estoppel is based on the principle that consistency in word and action imparts certainty and honesty to human affairs; if a person makes a representation to another, on the faith of which the latter acts to his prejudice, the former cannot resile from the representation made by him. It was held that the said principle can have no application to representations made regarding the assertion or enforcement of fundamental rights. For example, the concession made by a person that he do not possess and would not exercise his right to free speech and expression or the right to move freely throughout the territory of India cannot deprive him of those constitutional rights, any more than a concession that a person has no right of personal liberty can justify his detention contrary to the terms of Article 22 of the Constitution. It was further observed that fundamental rights are undoubtedly conferred by the Co<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rtion had no legal efficacy. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Venkateswara Rao Bolla And Another Versus The Senior Intelligence Officer, Directorate General of GST Intelligence Rep. by Spl. Public ProsectuorService Tax2018 (3) TMI 1390 – TELANGANA & ANDHRA PRADESH HIGH COURT – 2020 (38) G. S. T. L. 581 (A. P.)TELANGANA & ANDHRA PRADESH HIGH COURT – HCDated:- 12-3-2018Criminal Petition Nos. 2283 and 2285 of … Continue reading “Venkateswara Rao Bolla And Another Versus The Senior Intelligence Officer, Directorate General of GST Intelligence Rep. by Spl. Public Prosectuor”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-11160","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11160"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/11160\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n4. Section 89(d) of the Act mandates that any amount collected as service tax should be credited to the Central Government, within a period of six months from the date on which such payment becomes due.
\n5. The petitioners moved the Court of Special Judge for Economic Offences, Hyderabad by way of CRLMP.Nos.609 and 608 of 2018, respectively, seeking bail. But the Court below, while ordering bail, imposed the impugned condition, of furnishing bank guarantee for the remaining amount, after part payment made by the petitioners.
\n6. Section 73A(3) of the Act requires the Central Excise Officer, to serve notice, requiring the person liable to pay the amount, t<\/p>\n
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\n (ii) Where an assessee has been regularly filing service tax returns which have been accepted by the ST Department or which in any event have been examined by it, as in the case of the two Petitioners, without commencement of the process of adjudication of penalty under Section 83 A of the FA, another agency like the DGCEI cannot without an SCN or enquiry straightway go ahead to make an arrest merely on the suspicion of evasion of service tax or failure to deposit service tax that has been collected. Section 83 A of the FA which provides for<\/p>\n
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\nThe Court observed that, in the case with which it was dealing, the SCN was not even issued and determination of the service tax arrears was not made and in those circumstances, resorting to extreme coercive measure of arrest followed by detention of the accused therein was impermissible in law.
\n12. Even if it is assumed that the undertaking is given by the counsel, on clear instruction by the petitioners, the counsel for the petitioners submits that the parties cannot contract out of the benefits that are conferred by the Constitution of India or the Statutes, as the case may be and there can be no estoppel against the Constitution and Statutes. He draws support for the said contention from the decision of the Supreme Court in OLGA TELLIS v. BOMBAY MUNICIPAL CORPORATION (1985) 3 SCC 545. The Supreme Court observed as under:
\n A concession made by him in a proceeding, whether under a mistake of law or otherwise, tha<\/p>\n
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\n14. In the light of the above legal position, the decision of the High Court of Chhattisgarh in Miscellaneous Criminal Case No.4980 of 2013 dated 22.11.2013, on which the Special Public Prosecutor relies upon, cannot be followed. In the said case, the Court relied on the undertaking given by a party therein and imposed conditions in pursuance of the said undertaking, while granting bail to the petitioner therein.
\n15. The Court, on the basis of the undertaking given by a party, cannot convert itself into an executing Court to execute the terms agreed by the party, while deciding the bail application. Hence, with the above legal scenario, in the background, the condition imposed by the Court below to the extent of directing the petitioners to furnish bank guarantee for the remaining amount cannot be sustained and is set aside.
\nHence, the criminal petitions are allowed. As a sequel, the miscellaneous applications, if any pending, shall stand closed.
Cas<\/p>\n
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