Bombay High Court Quashes NBW Issued Against Actor Arjun Rampal Over 2019 Tax Evasion Case

The Bombay High Court recently quashed and set aside a 'non-bailable warrant' issued by the Ballard Pier Magistrate Court in the city against Bollywood actor Arjun Rampal in a 2019 Income Tax evasion case. 

Vacation Court judge Justice Advait Sethna noted that the order passed by the Additional Chief Metropolitan Magistrate Court in Ballard Pier was 'cryptic' and passed 'without application of mind' as the non-bailable warrant was issued in a case pertaining to a 'bailable offence.'

The judge noted that Rampal has been facing prosecution for offence under section 276C (2) (tax evasion) of the Income Tax Act, which provides for a maximum sentence of only three years and the offence is bailable in nature.

"The Magistrate however not taking into consideration such position, has mechanically passed the order issuing the non-bailable warrant against the petitioner in a bailable offence. On a perusal of the said order, it is clear that no reasons are recorded. In my view, it is a cryptic order which lacks application of mind. This would cause prejudice to the petitioner in the given the facts and circumstances as he would face an order of non bailable warrant in a case of bailable offence," Justice Sethna observed in the order passed on May 17. 

As regards to the other prayer made in Rampal's plea, for quashing the process issued against him in December 5, 2019, the judge noted that the IT Department has sought time for getting proper instructions to respond to the same. Therefore, the judge quashed the April 9, 2025 order passed by the Additional Chief Metropolitan Magistrate by which it has issued non-bailable warrant against the actor. 

"This order will not affect the proceedings on merits filed before the Magistrate which shall continue in accordance with law," the judge clarified. 

The matter will be next heard on June 16 by the regular court. 

Notably, the IT Department had alleged that the actor wilfully evaded paying tax to the tune of Rs 42.41 lakh for the assessment year 2016–17. The actor, however, claimed that upon receiving a notice from the IT Department, the Zee Entertainment Enterprises Ltd. which had contracted him, paid a sum of Rs 32.40 lakhs on his behalf on May 13, 2018.  Despite this payment, the IT Department ordered freezing of Rampal's HDFC Bank account on February 12, 2019 and even warned the bank manager against any transactions.

Subsequently, on February 18, a show-cause notice was issued to Rampal, asking him to explain why prosecution should not be initiated under the Income Tax Act.

The actor, however, admitted that taxes were unpaid at the time of filing the return due to his financial constraints He argued that there was a delay in payment but there was no intent on his part to evade, a legal requirement for prosecution.

Appearance:

Advocates Swapnil Ambure and A Nair instructed by Naik Naik & Co. for the Petitioner.

Advocates Sandeep Gupta and Narayanan represented the IT Department. 

Additional Public Proscutor PP Bhosale represented the for State.

Case Title: Arjun Amarjeet Rampal vs Income Tax Department (Writ Petition 2579 of 2025)

Citation: 2025 LiveLaw (Bom)

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