The special court for Prevention of Corruption Act cases granted anticipatory bail to Kamat, a Congress leader, in August.
"On one hand, the judge agrees that there is prima facie evidence against him and on the other hand he gives Kamat the benefit of doubt under the Code of Criminal Procedure," said Public Prosecutor S R Rivonkar, arguing before Justice C V Bhadang.
The special judge did not go through the entire record of the case, Rivonkar argued.
The appeal filed by the government was first heard by another HC judge but he recused himself without citing any reason, after which it was assigned to Justice Bhadang.
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The bail applications of former Goa PWD minister Churchill Alemao and former Project Director of Japan International Cooperation Agency (JICA) Anand Wachasunder, both arrested in this case two months ago, will come up for hearing before a lower court tomorrow.
The crime branch of Goa police filed the charge sheet in the case on September 28, naming Alemao, Wachasunder, former Louis Berger officials James McClung and Satyakam Mohanty, alleged hawala dealer Raichand Soni and local politician Arthur D'Silva as accused. It names Kamat as a suspect.
The hearing will continue tomorrow.