2019 Tax Evasion Case: Bombay HC Turns Down Non-Bailable Warrant Issued Against Actor Arjun Rampal

2019 tax evasion case

A vacation bench of the Bombay High Court, led by Justice Advait Sethna, set aside a non-bailable warrant issued against actor Arjun Rampal in a 2019 tax evasion case.

The High Court criticized the lower court’s order as “mechanical and cryptic,” stressing that it was passed “without application of mind” and “contrary to law.”

Background

The Income Tax Department initiated proceedings against Rampal under Section 276C(2) of the Income Tax Act, which deals with willful attempts to evade payment of tax, penalty, or interest. A conviction under this provision carries a maximum sentence of three years, classifying it as a bailable offence.

Lower Court’s Proceedings

Rampal challenged 2 orders of a magistrate’s court:

December 2019 notice—requiring him to appear in connection with the tax evasion complaint.

April 9, 2025, non-bailable warrant—issued after his advocate sought exemption from personal appearance on his behalf.

Despite the bailable nature of the offence, the magistrate rejected the plea for exemption and issued an NBW against Rampal. The actor’s legal team contended that this was an arbitrary step, especially since his counsel was present in court when the warrant was ordered.

Court’s Reasoning

Justice Sethna observed that the magistrate had overlooked two crucial factors:

The bailable status of the offence under Section 276C(2).

The presence of Rampal’s advocate during the hearing, which should have dispensed with the need for the actor’s personal appearance or at least warranted a reasoned decision.

He noted, “In my view, it is a cryptic order which lacks application of mind,” and found that issuing a non-bailable warrant in a bailable offence “would cause prejudice to the actor.” By failing to record any reasons, the magistrate effectively bypassed the legal safeguards designed to prevent misuse of coercive judicial powers.

Defense Arguments

Rampal’s counsel, Swapnil Ambure, underscored that while the full tax liability for the financial year 2016–17 was settled, there was a delay—not an evasion—of payment.

“The full tax amount for the financial year 2016-17 in question was paid but in a delayed manner. There is no evasion of tax as alleged by the department in their complaint,” Ambure argued before the High Court.

He further pointed out that Supreme Court precedents caution against the routine issuance of warrants in cases where less intrusive measures would suffice, particularly in bailable and non-violent offences.

With the NBW quashed, Rampal has secured interim relief. The Bombay High Court has listed the matter for a detailed hearing on June 16, when both parties will address the merits of the tax evasion claim and any procedural irregularities that may have arisen.

Implications For Judicial Process

This judgment highlights the necessity for magistrates to carefully consider the legal classification of offences and to articulate clear reasons before resorting to coercive orders.

It serves as a reminder that warrants—especially non-bailable ones—must not become a mechanical response to non-appearance, but should be issued only after due deliberation and justification.