Radhey Shyam & Anr. v. Assistant Commissioner
Considering the circumstances, including long earlier custody in related cases, partial payment of the tax liability and the attachments already made, the Court held that keeping the petitioners in custody would serve no useful purpose, without expressing any opinion on merits.
By CA Nikhil Gupta · Reviewed against the retained judgment 2026-10-14
Two directors of a multilevel marketing company who were arrested in a complaint of tax-evasion offences under the Central Excise Act, the Finance Act, 1994 and the CGST Act asked for regular bail. The Supreme Court noted the assessment order of about ₹54.78 crore, payment of ₹36 crore, their long custody in related cases and the attachments, and granted bail on conditions while keeping the attachments in place.
What happened
The petitioners sought regular bail in a complaint titled Assistant Commissioner, CGST Division, Hisar v. M/s. Future Maker Life Care Pvt. Ltd. & Ors., alleging offences under sections 9 and 9AA of the Central Excise Act, 1944, sections 83 and 89 of the Finance Act, 1994, read with section 174 of the Central Goods and Services Tax Act, 2017. The first petitioner was the Managing Director and the second the Chairman-cum-Managing Director of a company engaged in multilevel direct marketing. The case concerned the alleged failure to discharge the company's tax liability: GST returns from March 2018 were not filed, and the company had suffered an assessment order of ₹54,77,88,938 for October 2016 to June 2017. The company had paid ₹36 crore. The Court noted that the first petitioner had spent more than four and a half years in custody, and the second three years and nine months, in related predicate offences.
Questions before the court
- Should the directors be released on regular bail in the tax-evasion complaint?
Why the court ruled this way
The Court observed that, although the attachment of ₹261 crore in cash and of some immovable assets of the company and the petitioners' family members was far less than the overall claims against the company, no useful purpose would be served by keeping the petitioners in custody in this case (paragraph 3). It noted that the first petitioner had been granted interim bail on 4 May 2026 because of his wife's health, and that a medical certificate of 16 May 2026 indicated a significant risk if she underwent surgery (paragraph 4). Taking all circumstances into account, without expressing any opinion on merits, it directed release on bail (paragraph 5).
Controlling point
In the circumstances, and without any opinion on merits, the petitioners were entitled to regular bail, with the attachment of assets to continue.
Order and next steps
The petitioners were to be released on bail on furnishing bail bonds to the satisfaction of the Court of the Chief Judicial Magistrate, Hisar. The movable and immovable assets, including bank accounts, of the company, family members and those found associated were to remain attached, and no court was to de-freeze accounts without the Supreme Court's prior permission, except where accounts must be operated or assets disposed of to reimburse the verified claims of the investors or customers. Pending applications were closed.
Practical implications
In a tax-evasion complaint, long custody in related cases and part-payment of the liability can weigh in favour of bail, but the Court can keep attachments in place; any de-freezing or disposal of attached assets needs its permission.
Limits of this ruling
- The Court expressly gave no opinion on the merits of the case; the order is a bail order on its facts and is not a ruling on liability under the Central Excise Act, the Finance Act or the CGST Act.
Law and judgment source
- Central Excise Act, 1944, sections 9 and 9AA
- Finance Act, 1994, sections 83 and 89
- Central Goods and Services Tax Act, 2017, section 174
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Source checked: 2026-10-14 · Judgment paragraphs: paragraphs 1–7 · Later case history: not verified. Verify appeals, stays and subsequent orders before reliance.
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