Can Arrest Warrants Be Converted To Bailable Warrants In Serious Economic Offence Cases? Rajasthan High Court Refers To Larger Bench

The Rajasthan High Court has referred to a larger bench the question of whether arrest warrants can be converted to bailable warrants in serious economic offences under the provisions of the PMLA (Prevention of Money Laundering Act), Customs, CGST (Central Goods and Services Tax), as well as heinous offences punishable under Indian Penal Code/Bharatiya Nyaya Sanhita. Justice Anoop Kumar Dhand stated that, “creation of fake/non-existing Firms with an intent to pass on fake ITC on the basis of alleged supply shown in fake invoices and thereby passing on fake ITC to various beneficiaries and thus evading tax in crores of rupees, which affects the economy of the nation, and the same would certainly fall within the purview of grave economic offences.” In this case, a complaint under Section 132 of the CGST Act read with Section 132 of the Customs Act was submitted against the petitioner/assessee, wherein it has been alleged that a sum of Rs. 10,65,23,833/- has been claimed as Input Tax Credit. The Magistrate vide impugned order had taken cognizance against the assessee and had issued arrest warrants to procure the appearance of the assessee. The Additional Chief Judicial Magistrate (Economic Offences), Jaipur Metropolitan-II, rejected the application of the assessee filed under Section 70(2) Cr.P.C for conversion of arrest warrants into bailable warrants. The assessee argued that the allegation against the assessee is that of evading tax amounting to Rs. 6 Lakhs only, hence, under these circumstances, arrest of the assessee is not required. The department submitted that the allegation against the assessee is that of tax evasion amounting to Rs.10,65,23,833/-. The aforesaid act of the assessee amounts to heinous economic offence. The bench opined that the economic offence, having deep-rooted conspiracies and involving causing of huge loss to the public exchequer, needs to be viewed seriously and must be considered as a grave offence, affecting the economy of the Nation as a whole and thereby posing a serious threat to the financial health of the Country. There cannot be any straight-jacket formula to decide the bail applications in favour to the accused merely because the alleged offence is triable by the Court of Judicial Magistrate (First Class) and the same is punishable with imprisonment of five years only. Every bail application is required to be decided on its own facts and circumstances and the merits of the case, opined the bench. The bench disagreed with the counsel for the assessee that the assessee is entitled to get bail merely because the alleged offence under Section 132 of the CGST Act, 2017, is punishable with imprisonment of five years and the same is triable by the Court of First-Class Magistrate. The bench stated that a common man of this Country is paying all kinds of taxes, including CGST and SGST, to the Central and the State Government for the development and building of the Nation and the States, but persons like the petitioner are causing obstruction in the development of the Nation as well as the States by creating fake firms and causing huge loss to the public exchequer. Looking at the conflicting views of the coordinate benches of the court, the bench referred the matter to Chief Justice to constitute a Special/ Larger Bench to answer whether the arrest warrants issued against the accused committing economic offences or heinous offences like murder/rape/ dowry death/ dacoity can be converted into bailable warrants as a matter of right of the accused. Case Title: Nirmal Kumar Sharma v. Union Of India Case Number: S.B. Criminal Miscellaneous (Petition) No. 1947/2025Citation: 2025 LiveLaw (Raj) 387 Counsel for Petitioner/Assessee: Rahul Khandelwal Counsel for Respondent/Department: Amit Gupta-PP Click Here To Read/Download The Order

Can Arrest Warrants Be Converted To Bailable Warrants In Serious Economic Offence Cases? Rajasthan High Court Refers To Larger Bench

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Can Arrest Warrants Be Converted To Bailable Warrants In Serious Economic Offence Cases? Rajasthan High Court Refers To Larger Bench

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