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Bail, as it has been held in a catena of decisions, is not to be withheld as a punishment. Bail cannot be refused as an indirect method of punishing the accused person before he is convicted. These were upheld by the High Court of Orissa through the learned bench of Justice S.K. Panigrahi in the case of Smruti Ranjan Mohanty v. State of Odisha (BLAPL No. 776 of 2021)

The crux of the case is both the applicants and the other suspects, allegedly involved in the formation and operation of 12 fake / fraudulent companies on behalf of the people who are not in contact with them and abusing their identity proofs. The same is done without their knowledge, in order to obtain and use a counterfeit tax credit amounting to Rs. 20.45 crores in the capacity of counterfeit invoices without any real receipt or actual purchase of goods. Therefore, both defendants alleged that they were part of a tax evasion plan rated at Rs. 42 crores, therefore, are liable for the same payment under Section 132 of the Odisha Property Tax and Services Act, 2017 (“the Act”).

Proponents of her case have been working to make the actual transcript of this statement available online. It was argued that Petitioner 1 was just an employee who followed the instructions and instructions of his superiors. Similarly Petitioner 2 was not involved in the case as he is the sole owner of the shop and has nothing to do with the allegations of fraud and has been caught in the matter simply because he is the brother of Applicant 1.

It was also alleged that the allegations of fraud were made by someone else and that the fraudsters present were just pawns, they had been made  scrapegoats even though they were not involved in these fraudulent activities. It is further alleged that the applicants co-operated with the authorities and often came from the OGST offices to assist the authorities with the investigation, but despite their actual actions, they were remanded in custody at. 21.12.2020 and he remained in custody since then.

The learned bench of Justice S.K. Panigrahi while relied upon the judgments of the Apex Court in Vaman Narain Ghiya v. State of Rajasthan, (2009) 2 SCC 281; Moti Ram v. State of M.P., (1978) 4 SCC 47, to discuss the importance bail and grave consequences of pretrial detentions held that refusal of bail cannot be used as a method for punishing the accused persons before they are actually convicted. It noted that no doubt, the offence alleged against the Petitioners is a serious one in terms of alleged huge loss to the State exchequer, that, by itself, however, should not deter the Court from enlarging them on bail when there is no serious contention of the Respondent that the Petitioners, if released on bail, would interfere with the trial or tamper with evidence. And stated “As a side note it observed that more and more such cases are brought to the fore where the mere pawns who have been used as a part of larger conspiracy of tax fraud have been brought under the dragnet by the prosecution. It is perhaps time that the prosecution will do well to follow the trail upstream and bring the “upstream” parties who are the ultimate beneficiaries who are the gainers in these evil machinations.”

Click here to read the judgement

Judgement reviewed by Himanshu Ranjan