Nitesh Wadhwani VS State of M.P

This is the first application under Section 438 of the Criminal Procedure Code (Cr.P.C.) seeking anticipatory bail in Crime No. 23/2020, registered under Section 132(1)(a)(i) of the Goods and Services Tax Act (GST Act), and Sections 409, 467, 471, and 120-B of the Indian Penal Code (IPC). The case is being handled by the Department of Revenue Intelligence and the Directorate General of Goods and Services Tax Intelligence Central Excise Office, District Indore (hereinafter referred to as the ‘Department’).

The petitioner’s learned Senior Counsel commenced his arguments by stating that the petitioner’s sole fault is being the landlord of the premises where his tenant, who operates a factory, allegedly evaded tax through the clandestine sale of Pan Masala. The petitioner is not a partner of his tenant’s firm, M/s Vishnu Essence, nor is he involved with it in any capacity. Despite this, he is being depicted as the primary individual responsible for the alleged crimes committed by his tenant. The department has failed to produce any documents to substantiate their claims against the petitioner.

In response, the learned Additional Solicitor General (ASG) argued that the petitioner is the Director of a media company that publishes a daily newspaper named “Dabang Dunia.” Multiple vehicles implicated in the clandestine removal and transportation of Pan Masala bore the Dabang Dunia press stickers, and their drivers carried identity cards from Dabang Dunia issued by the transporter ‘Ashoo RoadLines.’ Furthermore, a dummy director of M/s Elora Tobacco Co. Ltd., Mr. Shayam Khemani, also possessed a press ID card of Dabang Dunia. This evidence suggests the petitioner’s involvement in the alleged tax evasion.

Additionally, the learned ASG referred to statements made by co-accused persons recorded under Section 70 of the GST Act. These statements indicated that the petitioner is, in fact, the sole owner, proprietor, or person in charge of M/s Vishnu Essence, Elora Tobacco Co. Ltd., M/s AAA Enterprises, M/s Namrata Impacts, and other associated entities. The petitioner is portrayed as the central figure or kingpin controlling the operations of these businesses and the primary financial beneficiary of the illicit Pan Masala trade. He is considered the mastermind behind the alleged tax evasion scheme, which involves sums running into crores of rupees. Consequently, the learned ASG argued that the petitioner is not entitled to bail.

To refute the statements recorded under Section 70 of the GST Act, the learned Senior Counsel for the petitioner highlighted that the co-accused individuals had retracted their statements as soon as they got the opportunity.

This document pertains to the first application under Section 438 of the Criminal Procedure Code (CrPC) seeking anticipatory bail in Crime No 23/2020 The case involves alleged offenses under Section 132(1)(a)(i) of the Goods and Services Tax Act (GST Act), and Sections 409, 467, 471, 120-B of the Indian Penal Code (IPC), registered by the Department of Revenue Intelligence and Directorate General of Goods and Services Tax Intelligence Central Excise Office, Indore

1 Role of the Petitioner The learned Senior Counsel for the petitioner argued that the petitioner’s only fault is being the landlord of premises where his tenant allegedly evaded taxes through the clandestine sale of Pan Masala The petitioner is not a partner in the tenant company, M/s Vishnu Essence, nor involved in its operations No evidence was presented by the department to implicate the petitioner in the alleged crimes committed by his tenant

2 Counterarguments by the Additional Solicitor General (ASG) The petitioner is the Director of a media company, Dabang Dunia, which publishes a daily newspaper Vehicles involved in the illegal transportation of Pan Masala displayed Dabang Dunia press stickers, and drivers carried identity cards from Dabang Dunia provided by Ashoo RoadLines The dummy director of M/s Elora Tobacco Co Ltd also had a Dabang Dunia press ID card, indicating the petitioner’s involvement in the tax evasion scheme Statements recorded under Section 70 of the GST Act by co-accused individuals suggest that the petitioner was the owner, proprietor, or in-charge of multiple implicated firms, including M/s Vishnu Essence, Ellora Tobacco Co Ltd, AAA Enterprises, and Namrata Impacts The petitioner is portrayed as the kingpin of a large-scale illicit Pan Masala trade, with effective control over factory operations and significant financial benefits

3 Rebuttal by Petitioner’s Counsel The co-accused retracted their statements, claiming they were made under duress and pressure from the department officials, rendering them unreliable No documentary or oral evidence supports the statements, and no recoveries were made based on them Therefore, these statements cannot be used to draw adverse inferences against the petitioner at this stage Both parties spent considerable time arguing whether the procedures prescribed in Chapter XII of the CrPC were followed, with the defense asserting that the proceedings were void due to non-compliance

4 Director of Dabang Dunia It is undisputed that the petitioner is a director of Dabang Dunia, but it is contended that the media company is not responsible for unauthorized use of its stickers or ID cards by implicated vehicles or drivers

5 Pendency of Investigation The petitioner’s counsel argued that the department had already completed the custodial interrogation of Kishore Wadhwani, the petitioner’s uncle, who faces similar charges based on the same evidence Therefore, no further custodial interrogation of the petitioner is necessary

The document captures the detailed arguments presented by both sides concerning the petitioner’s involvement in the alleged tax evasion and the procedural aspects of the case.

This application under Section 438 of the Cr.P.C. seeks anticipatory bail in crime no. 23/2020, registered under Section 132(1)(a)(i) of the GST Act and various sections of the IPC by the Department of Revenue Intelligence and the Directorate General of GST Intelligence, Indore. The petitioner, represented by Senior Counsel, argues that he is only the landlord of the premises where his tenant allegedly evaded tax by clandestine sales of Pan Masala, and he has no involvement with the tenant’s business.

The Additional Solicitor General (ASG) counters that the petitioner, a Director of a media company “Dabang Dunia,” is implicated through vehicles carrying the company’s press stickers and drivers with its identity cards. Co-accused individuals have named the petitioner as the main person behind multiple firms involved in the illegal Pan Masala trade, asserting his effective control and financial benefit from these operations.

The petitioner’s counsel contests these statements, claiming they were made under duress and are unreliable under Section 136 of the GST Act. They argue no substantial evidence supports these claims, and any adverse inference against the petitioner is premature. The procedural validity of the case under Chapter XII of the Cr.P.C. is also questioned.

The petitioner acknowledges being a Director of “Dabang Dunia” but denies responsibility for the misuse of the company’s identifiers. The ASG highlights the petitioner’s non-cooperation with the investigation, noting he ignored multiple summonses, and his unavailability hinders the investigation. The petitioner’s counsel argues custodial interrogation is unnecessary as it has already been completed for his uncle, Kishore Wadhwani, who faces similar charges based on the same evidence.

Furthermore, there are allegations that the petitioner’s non-cooperation includes instances of obstruction during searches, which led to a separate FIR. The petitioner fears similar treatment and coercion if arrested, based on the treatment of his co-accused uncle.

In summary, the petitioner seeks anticipatory bail, arguing lack of involvement and coercion in statements against him, while the prosecution emphasizes his significant role and non-cooperative behavior in the ongoing investigation, seeking to deny the bail request.

This is an anticipatory bail application under Section 438 of the Cr.P.C. in connection with Crime No. 23/2020. The case is registered under Section 132(1)(a)(i) of the GST Act, and Sections 409, 467, 471, and 120-B of the IPC by the Department of Revenue Intelligence and the Directorate General of Goods and Services Tax Intelligence, Central Excise Office, Indore.

The petitioner, a landlord, is accused due to his tenant’s alleged tax evasion through the clandestine sale of Pan Masala. The petitioner’s senior counsel argues that the petitioner is neither a partner nor connected to the tenant’s business and no evidence has been provided by the department to implicate him.

The Additional Solicitor General (ASG) counters that the petitioner is the Director of a media company, “Dabang Dunia,” whose vehicles were allegedly used in the transportation of Pan Masala. The ASG claims that co-accused statements recorded under Section 70 of the GST Act reveal the petitioner as the mastermind behind multiple businesses involved in the tax evasion scheme, and thus, he is not entitled to bail.

The petitioner’s counsel refutes these statements, arguing they were retracted due to being made under duress and cannot be relied upon. Additionally, no recoveries were made based on these statements, which further undermines their credibility.

A major point of contention is whether the procedural requirements of Chapter XII of the Cr.P.C. were followed, with both parties debating its compliance. The petitioner acknowledges being a director of Dabang Dunia but denies responsibility for the unauthorized use of company identifiers by vehicles implicated in the case.

The investigation’s ongoing status is used as grounds for denying bail, countered by the petitioner’s claim that his uncle, arrested under similar charges, has already undergone custodial interrogation, making further custodial interrogation of the petitioner unnecessary. The petitioner alleges that co-accused were harassed into making statements and fears similar treatment if arrested. He expresses willingness to cooperate with the investigation if his rights are protected by the court.

The petitioner has been accused of non-cooperation by refusing summons, leading to disruptions in the investigation. The ASG highlights an incident where officials were allegedly assaulted during a search at the petitioner’s house, demonstrating non-cooperation.

The petitioner contests this allegation, stating that the officials misbehaved and forcibly tried to enter the house without proper identification, leading to the confrontation. He argues that the FIR against him was lodged to pressure him into compliance and should not be grounds to deny bail.

The applicability of Section 438 Cr.P.C. in cases under the GST Act is debated, with the petitioner’s counsel citing instances where higher courts have granted anticipatory bail in similar cases. The final determination on this matter is pending consideration by the Hon’ble Supreme Court. 

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