The Allahabad High Court, led by Justice Samit Gopal, granted bail to a Chinese national, directing updates via the Chinese Embassy. The Central Goods and Services Tax Department cited UP ATS arrests Supreme Court of India judges in affidavits.
PRAYAGRAJ: While granting bail to a Chinese national detained in a CGST tax evasion case since August of the previous year, the Allahabad High Court imposed a condition that she must keep the trial court updated about her location and movements through the Chinese Embassy every two months.
The Central Goods and Services Tax (CGST) Department noted in its affidavit that the individual, Alice Lee alias Li Tengli, has a history of offenses, having previously been arrested by the Uttar Pradesh Anti-Terrorist Squad (UP ATS) in a 2021 hawala case and released on bail in 2023.
During the bail hearing, the judge expressed concern over the practice of citing Supreme Court judges’ names in legal submissions. The bench, led by Justice Samit Gopal, pointed out that an officer from the CGST Department mentioned the names of apex court justices in his counter affidavit while referencing a specific judgment.
The court remarked further,
“… the court of the Additional Sessions Judge, Meerut, while deciding the bail application of the applicant in the first bail application, has… referred to judgments relied upon by learned counsel for the CGST Department but has therein mentioned names of the Hon’ble Judges of the Apex Court Presiding over the Bench in the said matter.”
Justice Gopal emphasized that
“This system of mentioning names of Hon’ble judges while giving reference to the judgments is totally uncalled for.”
He directed the Registrar (Compliance) to communicate this order to the District and Sessions Judge of Gautam Buddha Nagar and the relevant court for necessary action, and to alert the Director General of the Central Goods and Services Tax, Commissionerate, Gurugram, to ensure future caution.
The Tax Evasion Case
Alice petitioned the High Court for bail while awaiting trial on charges brought against her under various sections of the CGST Act, 2017, at the CGST Commissionerate’s police station in the Gautam Buddha Nagar district. She has been incarcerated since August 26 of the prior year.
The case was initiated based on a complaint filed by the Superintendent (Anti-Evasion), CGST, Gautam Buddha Nagar, on October 17 against four individuals Vinay Kumar, Alice Lee, Hu Lei, Tang Kai and Tentech LED Display Private Ltd. The complaint alleged that they were involved in manufacturing goods in Greater Noida, having shifted their operational activities from their principal business location to a different site where they were found operating covertly.
According to the complaint, the accused were evading GST by mislabeling their finished goods as “cabinets,” despite the fact that a cabinet is merely a component of a Visual Display Unit (VDU). Only when all components, including the cabinet, are assembled can the VDU be classified as a finished product, which falls under a GST rate of 28%.
However, the firm was reportedly sending out VDUs while only charging 18% GST, leading to a tax shortfall of 10%, as stated in the CGST court filings. The court learned that the total tax evasion amounted to Rs 88,80,751 for the financial years spanning 2019-20 to 2024-25. Following the completion of the inquiry, the applicant was arrested, leading to the filing of the complaint.
Observations of High Court
In its ruling, Justice Gopal noted that the applicant is a Chinese national currently residing temporarily in Greater Noida. Her counsel argued that she was hired on February 21, 2024, to perform security functions for the Indian branch of the company at a fixed salary of Rs 15,000, claiming that she had been wrongfully implicated.
It was also mentioned that she lives with her husband and their three-year-old daughter. The maximum sentence for the alleged offense is five years. Her counsel reiterated that a co-accused had recently been granted bail by another bench of the court.
In response to submissions from both parties, Justice Gopal concluded,
“Looking into the facts and circumstances of this case, the nature of evidence, and the absence of any convincing material to indicate the possibility of tampering with evidence, this court is of the view that the applicant may be enlarged on bail. Let the applicant… be released on bail in the aforesaid case.”
Among the conditions set for bail, the court mandated that-
- The applicant must submit a certificate from the Chinese Embassy to the trial court and attend all trial proceedings.
- Additionally, she is prohibited from leaving the country without the trial court’s consent and
- Must inform the court, via her embassy, about her place of residence and movement every two months.
Court documents indicated that Alice’s visa had expired, and she applied for a new one on February 3 under the Entry Visa (X-Misc) category, which is designated for foreign nationals facing criminal charges or trial proceedings in order to facilitate their appearance in court or before investigating authorities.