Karnataka High Court
Sri Akram Pasha vs Senior Intelligence Officer on 19 December, 2025
Author: Shivashankar Amarannavar
Bench: Shivashankar Amarannavar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF DECEMBER, 2025
BEFORE
THE HON'BLE Mr. JUSTICE SHIVASHANKAR AMARANNAVAR
CRIMINAL PETITION No.15066/2025
BETWEEN :
SRI AKRAM PASHA
AGED 53 YEARS
S/O LATE ABDUL RASHID
No.17/A, BANNIMANTAP
A INDUSTRIAL LAYOUT, MANDI MOHALLA
VTC MYSORE - 570 015.
... PETITIONER
(BY SRI HASHMATH PASHA, SENIOR COUNSEL FOR
SRI KARIAPPA N A, ADVOCATE)
AND :
SENIOR INTELLIGENCE OFFICER
DGGI, BENGALURU ZONAL UNIT
K H ROAD, BENGALURU - 560 027.
REPRESENTED BY
SPECIAL PUBLIC PROSECUTOR
HIGH COURT BUILDING
BENGALURU - 560 001.
... RESPONDENT
(BY SRI MADHU N RAO, SENIOR STANDING COUNSEL)
2
---
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 OF THE BNSS, 2023 PARYING TO RELEASE HIM ON
ANTICIPATORY BAIL AND BE PLEASED TO DIRECT TO THE
INVESTIGATING OFFICER TO RELEASE THE PETITIONER ON
BAIL IN CASE OF HIS ARREST BY THE RESPONDENT GST
OFFICER IN PURSUANCE OF HIS SUMMONS DATED
10.10.2025 AS PER SUMMONS UNDER SECTION 70 OF THE
CGST ACT, BEARING CBIC-DIN-202510DSS00000555A56
(ANNEXURE-A) IN THE ABOVE CASE.
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 12.12.2025, THIS DAY,
SHIVASHANKAR AMARANNAVAR J, DELIVERED THE
FOLLOWING;
CORAM: HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
CAV ORDER
This petition is filed by the petitioner/accused under
Section 482 of BNSS praying to grant anticipatory bail in
case of his arrest, pursuant to summons dated 10.10.2025
issued under Section 70 of the Central Goods and Services
Act, 2017 (for short 'CGST Act') bearing CBIC-DIN-
202510DSS00000555A56.
2. Heard the learned Senior Counsel for the petitioner
and learned counsel for respondent.
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3. Learned Senior counsel for the petitioner would
contend that the offence alleged is under Section
132(1)(b)(c) of CGST Act and the maximum sentence that
can be imposed for the offence alleged is imprisonment for
five years and fine. Accused No.1 came to be arrested and
charge sheet has been filed against him and as per the
table in the charge sheet tax due is Rs.21,64,35,395/-.
Petitioner is the Proprietor of A.R.Steel and he is stated to
be due of Rs.24,89,630/-. Sri Nasir Ahmed who is alleged
of tax due of Rs.18,57,88,319/- has been granted
anticipatory bail. The petitioner alleged to have escaped at
search on 10.09.2025 and he has been issued with
summons under Section 69 dated 10.10.2025. Petitioner
has been issued with summons under Section 70 of the
CGST Act to appear before the Senior Intelligence Officer,
DGGI, Bengaluru on 21.10.2025 and therefore, he
apprehends his arrest. In the year 2024, the State Officers
have adjudicated the matter and order of adjudication
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dated 30.08.2024 indicate that tax due is Rs.27,10,123/-
and it has been paid by the petitioner. The order of
adjudication dated 25.02.2025 indicate that the son of
petitioner is tax due of Rs.11,90,301/-. GST return filed by
the petitioner has been adjudicated and it has been
finalized. The petitioner has been granted anticipatory bail
in Crime No.162/2025. The petitioner participated in State
adjudication. If the amount adjudicated is not paid after
demand, then it amounts to offence. The offence is
compoundable under Section 138 of the GST Act. The
object of GST is not to arrest, but to collect tax. There is
no bar under the Act for grant of anticipatory bail. Every
document is uploaded online and it is available there. The
GST authorities initiated investigation and it was pending
with the State authorities. Under Section 6(2)(b) of the GST
there is a bar for authorities to investigate when
investigation is pending. The State GST Authority has
handed over the documents to Central authorities. The files
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handed over by the State authorities to the Central
authorities pertaining to A.R.Steel are four bundles which
includes purchase sale files. Petitioner has paid the tax
assessed by the State authorities. Accused No.1 has been
granted anticipatory bail when the case was with the State
authorities. Learned Senior Counsel relying on several
decisions contended that the offence alleged against the
petitioner is non-bailable offence and the punishment
provided is imprisonment for five years and therefore, it is
not a heinous offence and the petitioner is entitled for grant
of anticipatory bail. On these grounds, he prayed to allow
the petition.
4. Per contra, learned counsel for the respondent
would contend that the offence alleged against the
petitioner is cognizable and non-bailable offence and
punishment provided is imprisonment for five years and
fine. The search has been conducted at 13 locations. The
petitioner and his son have created fake invoice. Rs.50 to
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60 Crores of GST is due by the petitioner. At the time of
raid the persons of petitioner's side have manhandled the
officers and FIR have been registered in Crime No.161/2025
and 162/2025. There is forgery of document by the
petitioner. The petitioner has not paid the GST for
transactions worth Rs.100 Crores. The statement of person
under Section 70 is admissible in evidence. The statement
of Nasir Ahmed has been recorded under Section 70. The
summons has been issued to the petitioner for six times.
Inspite of that the petitioner has not appeared before the
authorities for interrogation. The petitioner is required for
custodial interrogation. The offence alleged against the
petitioner is economic offence. On these grounds, he prayed
for rejection of the petition.
5. Having heard the learned counsels, the Court has
perused the materials placed on record.
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6. The case of the respondent is that based on the
intelligence inputs, the investigation conducted has
unearthed a syndicate of individuals, and entitled who have
indulged themselves into creation of bogus entities; availing
of inadmissible and fraudulent Input Tax Credit without
actual underlying supply of goods and/or services; issuance
of invoices without underlying supply of goods and/or
services.
7. The instant issue is related to fraudulent availment
and passing of fake input tax credit, without actual supply
of goods/services. The petitioner, Sri Akram Pasha,
Proprietor of M/s.A.R.Steel, (GSTIN-29AHBPA2384H1ZJ)
having principal place of business at 105, Lashkar Mohalla
Gandhinagar, Udayagiri MP Main Road, Mysore is engaged
in availment of irregular and fraudulent input tax credit to
the tune of Rs.31.33 Crores on the strength of fake invoices
without receipt of any goods/services, either from the non-
existing entities or from the entities which are involved in
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the chain of fake invoicing. A coordinated search on
10.09.2025 at 13 locations were conducted under Section
67(2) of CGST Act, 2017. As per search authorization
issued by the competent authority, a search proceeding was
conducted at both of the residential premises of the
petitioner located at Mysore.
8. As per investigation carried out based on records
available, it is evident that Shri Akram Pasha, Proprietor of
M/s.A.R.Steel Traders, located at 105, Lashkar Mohalla,
Gandhinagar, Udayagiri Mp Main Road, Mysore - 570019
has not carried out business activity from the declared
business premises for a long time as evident from the
mahazar drawn at the business premises.
9. Further, on analysis of the inward supply details, it
is evident that he is engaged in availing ineligible and
fraudulent Input Tax Credit on the strength of bogus
invoices without any underlying supply of goods/or services
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from the entities which have been cancelled suo-moto by
the department and the entities who are actively involved in
the fake ITC supply chain. The petitioner has availed
fraudulent Input Tax Credit of Rs.11,10,17,359/- from such
36 suppliers who have been cancelled/suspended by the
department for various reason viz. wrongful availment of
ITC, non-existent entity etc. Further, during investigation,
it is also found that the majority of Input Tax Credit to the
extent of Rs.20,52,39,822/- has been availed from
M/s.N.M.G. Traders (GSTIN-29EMPIA3360K1ZW), having no
active business whatsoever, which is found to be registered
for namesake with sole intention of availing and passing on
fake Input Tax Credit. Therefore, it is seen that the
petitioner has availed total ineligible ITC of
Rs.31,62,57,131/- from 36 suo-moto cancelled entities and
M/s.N.M.G.Traders, a namesake entity.
10. Even though the petitioner has been issued with
summons under Section 70 CGST Act dated 18.09.2025,
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24.09.2025, 29.09.2025, 10.10.2025, 31.10.2025,
03.11.2025, he has failed to appear before the respondent.
11. The petitioner apprehending his arrest has filed
Crl.Misc.No.8081/2025 under Section 482 of BNSS seeking
anticipatory bail and the same came to be rejected by order
dated 23.10.2025 by LXVII Additional City Civil and
Sessions Judge, Bengaluru City. Therefore, the petitioner
has approached this Court seeking anticipatory bail.
12. Before adverting to the arguments and case laws
cited, it is essential to analyse the scheme of the CGST Act.
The Act was introduced to harmonise the indirect tax
regime in the country. In furtherance to this, several
powers have been conferred on the authorities under the
Act. One such power is the power of inspection, seizure
and arrest under Chapter XIV of the Act. Under section 69
of the Act, when the person has reasons to believe that the
person has committed any offence under section 132, the
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Commissioner may by order authorize any officers of the
Central tax to arrest such person.
13. Section 132 of the CGST Act is reproduced
hereunder:
"132. Punishment for certain offences.--(1) Whoever
commits, or causes to commit and retain the benefits
arising out of, any of the following offences, namely :--
(a) supplies any goods or services or both without
issue of any invoice, in violation of the provisions of
this Act or the rules made thereunder, with the
intention to evade tax;
(b) issues any invoice or bill without supply of
goods or services or both in violation of the provisions
of this Act, or the rules made thereunder leading to
wrongful availment or utilisation of input-tax credit or
refund of tax;
(c) avails input-tax credit using the invoice or bill
referred to in clause (b) or fraudulently avails input-
tax credit without any invoice or bill;
(d) collects any amount as tax but fails to pay the
same to the Government beyond a period of three
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months from the date on which such payment
becomes due;
(e) evades tax or fraudulently obtains refund and
where such offence is not covered under clauses (a) to
(d);
(f) falsifies or substitutes financial records or
produces fake accounts or documents or furnishes any
false information with an intention to evade payment
of tax due under this Act;
(g) obstructs or prevents any officer in the
discharge of his duties under this Act;
(h) acquires possession of, or in any way concerns
himself in transporting, removing, depositing, keeping,
concealing, supplying, or purchasing or in any other
manner deals with, any goods which he knows or has
reasons to believe are liable to confiscation under this
Act or the rules made thereunder;
(i) receives or is in any way concerned with the
supply of, or in any other manner deals with any
supply of services which he knows or has reasons to
believe are in contravention of any provisions of this
Act or the rules made thereunder;
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(j) tampers with or destroys any material evidence
or documents;
(k) fails to supply any information which he is
required to supply under this Act or the rules made
there under or (unless with a reasonable belief, the
burden of proving which shall be upon him, that the
information supplied by him is true) supplies false
information ; or
(l) attempts to commit, or abets the commission of
any of the offences mentioned in clauses (a) to (k) of
this section, shall be punishable,--
(i) in cases where the amount of tax evaded or
the amount of input-tax credit wrongly availed or
utilised or the amount of refund wrongly taken
exceeds five hundred lakh rupees, with
imprisonment for a term which may extend to five
years and with fine ;
(ii) in cases where the amount of tax evaded or
the amount of input-tax credit wrongly availed or
utilised or the amount of refund wrongly taken
exceeds two hundred lakh rupees but does not
exceed five hundred lakh rupees, with
imprisonment for a term which may extend to three
years and with fine ;
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(iii) in the case of any other offence where the
amount of tax evaded or the amount of input-tax
credit wrongly availed or utilised or the amount of
refund wrongly taken exceeds one hundred lakh
rupees but does not exceed two hundred lakh
rupees, with imprisonment for a term which may
extend to one year and with fine ;
(iv) in cases where he commits or abets the
commission of an offence specified in clause (f) or
clause (g) or clause (j), he shall be punishable with
imprisonment for a term which may extend to six
months or with fine or with both.
(2) Where any person convicted of an offence
under this section is again convicted of an offence
under this section, then, he shall be punishable for the
second and for every subsequent offence with
imprisonment for a term which may extend to five
years and with fine.
(3) The imprisonment referred to in clauses (i), (ii)
and (iii) of sub-section (1) and sub-section (2) shall,
in the absence of special and adequate reasons to the
contrary to be recorded in the judgment of the court,
be for a term not less than six months.
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(4) Notwithstanding anything contained in the Code
of Criminal Procedure, 1973 (2 of 1974), all offences
under this Act, except the offences referred to in sub-
section (5) shall be non-cognizable and bailable.
(5) The offences specified in clause (a) or clause
(b) or clause (c) or clause (d) of sub-section (1) and
punishable under clause (i) of that sub-section shall be
cognizable and non-bailable.
(6) A person shall not be prosecuted for any
offence under this section except with the previous
sanction of the Commissioner.
Explanation.--For the purposes of this section, the
term 'tax' shall include the amount of tax evaded or
the amount of input-tax credit wrongly availed or
utilised or refund wrongly taken under the provisions
of this Act, the State Goods and Services tax Act, the
Integrated Goods and Services tax Act or the Union
Territory Goods and Services tax Act and cess levied
under the Goods and Services Tax (Compensation to
States) Act."
14. Chapter XIX deals with offences and penalties.
Section 132 provides for punishment for committing certain
offences. As per sub-section (1), whoever commits any of
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the twelve offences mentioned therein shall be punished in
the manner provided in clauses (i) to (iv) of sub-section
(1). In this case, we are concerned with offences under
clauses (b) and (c) of sub- section (1). As per clause (c),
the offence is availing input-tax credit using invoice or bill
without the supply of goods or services or both in violation
of the CGST Act ; and as per clause (b), a person who
issues any invoice or bill without supply of goods or services
or both in violation of the provisions of the CGST Act or the
rules made thereunder leading to wrongful availment or
utilization of input-tax credit or refund of tax. If a person
commits the above two offences as per clauses (c) and (b),
he shall be punishable under clause (i) if the amount of tax
evaded or the amount of input-tax credit wrongly availed of
or utilized or the amount of refund wrongly taken exceeds
five hundred lakh rupees with imprisonment for a term
which may extend to five years and with fine. All other
penalties are below five years. Therefore, the maximum
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penalty that can be imposed for committing offences under
clauses (c) and (b) of sub-section (1) of section 132 is
imprisonment for a term which may extend to five years
and with fine. As per sub-section (5), the offences specified
in clause (a) or (b) or (c) or (d) of sub-section (1) and
punishable under clause (i) of that section are cognizable
and non-bailable.
15. Section 132 of the Central Goods and Services
tax Act, 2017 ("the CGST Act") lists a total of twelve
offences that are punishable by imprisonment and/or a fine.
The term of imprisonment and the amount of fine, is
dependent on the amount involved in the offence, or in
some cases, the act committed by the offender. The
provision further categorises certain offences as cognizable
and non-bailable, if the amount involved exceeds
16. Rupees five hundred lakhs. These offences relate
to persons who supply goods or services without issuing
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invoices, or issue invoices without supplying goods or
services and thus wrongfully availing input-tax credit ; or to
persons who collect tax but fail to pay it to the Government
beyond a period of three months from date on which
payment becomes due. All other offences listed under the
Act have been categorised as non-cognizable and bailable.
17. Section 138 of the CGST Act further dilutes the
heinousness of offences under the Act. The said section
makes every offence under the Act compoundable except
for certain circumstances which have been specified under
different clauses to the proviso of section 138. The relevant
section has been reproduced hereunder :
"138. Compounding of offences.--(1) Any offence under
this Act may, either before or after the institution of
prosecution, be compounded by the Commissioner on
payment, by the person accused of the offence, to the
Central Government or the State Government, as the case
be, of such compounding amount in such manner as may
be prescribed :
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Provided that nothing contained in this section shall
apply to,--
(a) a person who has been allowed to compound
once in respect of any of the offences specified in
clauses (a) to (f) of sub-section (1) of section 132
and the offences specified in clause (l) which are
relatable to offences specified in clauses (a) to (f) of
the said sub-section ;
(b) a person who has been allowed to compound
once in respect of any offence, other than those in
clause (a), under this Act or under the provisions of
any State Goods and Services tax Act or the Union
Territory Goods and Services tax Act or the
Integrated Goods and Services tax Act in respect of
supplies of value exceeding one crore rupees ;
(c) a person who has been accused of committing
an offence under this Act which is also an offence
under any other law for the time being in force ;
(d) a person who has been convicted for an
offence under this Act by a court ;
(e) a person who has been accused of committing
an offence specified in clause (g) or clause (j) or
clause (k) of sub-section (1) of section 132 ; and
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(f) any other class of persons or offences as may
be prescribed :
Provided further that any compounding allowed
under the provisions of this section shall not affect the
proceedings, if any, instituted under any other law :
Provided also that compounding shall be allowed
only after making payment of tax, interest and penalty
involved in such offences.
(2) The amount for compounding of offences under
this section shall be such as may be prescribed, subject
to the minimum amount not being less than ten
thousand rupees or fifty per cent. of the tax involved,
whichever is higher, and the maximum amount not
being less than thirty thousand rupees or one hundred
and fifty per cent. of the tax, whichever is higher.
(3) On payment of such compounding amount as
may be determined by the Commissioner, no further
proceedings shall be initiated under this Act against the
accused person in respect of the same offence and any
criminal proceedings, if already initiated in respect of
the said offence, shall stand abated."
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18. Sections 69 and 70 of the CGST Act are
reproduced hereunder :
"69. Power to Arrest.--(1) Where the Commissioner has
reasons to believe that a person has committed any
offence specified in clause (a) or clause (b) or clause (c) or
clause (d) of sub-section (1) of section 132 which is
punishable under clause (i) or (ii) of sub-section (1), or
sub-section (2) of the said section, he may, by order,
authorise any officer of Central tax to arrest such person.
(2) Where a person is arrested under sub-section (1)
for an offence specified under sub-section (5) of section
132, the officer authorised to arrest the person shall
inform such person of the grounds of arrest and
produce him before a magistrate within twenty- four
hours.
(3) Subject to the provisions of the Code of Criminal
Procedure, 1973 (2 of 174),--
(a) where a person is arrested under sub-section
(1) for any offence specified under sub-section (4)
of section 132, he shall be admitted to bail or in
default of bail, forwarded to the custody of the
magistrate ;
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(b) in the case of a non-cognizable and bailable
offence, the Deput Commissioner or the Assistant
Commissioner shall, for the purpose of releasing an
arrested person on bail or otherwise, have the
same powers and be subject to the same provisions
as an officer-in- charge of a police station.
70. Power to summon persons to give evidence and
produce documents.--(1) The proper officer under this
Act shall have power to summon any person whose
attendance he considers necessary either to give
evidence or to produce a document or any other thing in
any inquiry in the same manner, as provided in the case
of a civil court under the provisions of the Code of Civil
Procedure, 1908."
19. Chapter XIV of the CGST Act deals with inspection,
search, seizure and arrest. It consists of sections 67 to 72.
Section 70 deals with power to summon persons to give
evidence and produce documents. As per sub-section (1),
the proper officer under the CGST Act has the power to
summon any person whose attendance he considers
necessary either to give evidence or to produce a document
or any other thing in any enquiry in the same manner as
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provided in the case of a civil court under the provisions of
the Civil Procedure Code, 1908. Thus, section 70 (1)
confers the power on the proper officer to summon any
person whose attendance he considers necessary to either
tender evidence or to produce documents, etc., in any
enquiry. Exercise of such a power is similar to the powers
exercised by a civil court under the Civil Procedure Code,
1908. Sub-section (2) further clarifies that every inquiry in
which summons are issued for tendering evidence or for
production of documents is to be deemed to be a judicial
proceeding within the meaning of sections 193 and 228 of
the Penal Code, 1860.
20. There is no embargo under the CGST Act
restraining the petitioner from seeking pre-arrest bail.
Economic offences such as tax evasion, money laundering,
etc., affect the economy of the country and thus are
considered grave in nature. To deter persons from indulging
in such economic offences, criminal sanctions are required
24
to be imposed. One of the most prominent criminal
sanctions imposed with regard to economic offences is that
of arrest. It is widely acknowledged that arrests result in
deprivation of liberty of a person. Thus, while it is
imperative to maintain law and order in society, the power
to arrest must also always be subject to necessary
safeguards. Against this backdrop, analysing the arrest
provisions under the goods and services tax law, with a
view to study the adequacy of the safeguards and
authorisation built into the text of the statute, the interplay
between these provisions and the standards of arrest has to
be established through judicial precedents, as well as other
sources such as the Constitution of India and general
statutes such as the Code of Criminal Procedure.
21. On the other side, the case of Shravan. A Mehra v.
Superintendent of Central Tax, Anti evasion,
Commissionerate Manu/KA/0875/2019 is the one that
squarely applies to the present case. In this matter, bail
25
was granted in relation to offences under the Act in view of
the fact that the offences were not punishable with
imprisonment for more than five years. In this case, the
petitioner was alleged of having obtained invoices from the
company of the respondent without delivery of the goods
and thereby evading payment of tax and committing an
offence under section 132(1)(b) of the Act. Therein, the
petitioner once appeared before the authorities concerned
but on a subsequent summon, they were apprehending
arrest because another witness who was called to tender
statement was arrested by the police. Thus, an application
for anticipatory bail was filed before the court. The court
after analysing the provisions of the Act held as under :
"On close reading of the above said sections, the
maximum punishment provided under the Act is five
years and fine and if that is taken into consideration, the
magnitude of the alleged offence and it is not punishable
with death or imprisonment for life. Even as per the said
provision, the alleged offence is also compoundable with
the authority, who has initiated the said proceedings. The
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only consideration which the court has to consider while
releasing the petitioners on anticipatory bail is, that
whether the petitioners can be secured for the purpose of
investigation or for the purpose of trial. Under such
circumstances, I feel that by imposing stringent
conditions if the petitioners are ordered to be released on
anticipatory bail, it would meet the ends of justice."
22. In a similar matter, bail was granted by the Delhi
Court in the case of Raghav Agrawal v. Commissioner of
Central Tax and GST Delhi North Bail Application 4019/2020
vide order dated 21st December, 2020.
23. Again, in a similar vein, the Bombay High Court
also granted ad-interim relief to the petitioner by directing
the investigative authorities not to take any coercive steps
against the petitioner in Sapna Jain v. Union of India [2020]
SCC Online 13064. This was challenged before the
Honourable Supreme Court. The Honourable Supreme Court
did not interfere with the order and tagged it along with
other matters that were listed before a three-judge bench
27
in the case of Union of India v. Sapna Jain (2021) 2 SCC
782. The matter is pending before the three-judge bench
and has not been decided till date. Thus, the question
regarding anticipatory bail while dealing with offences under
CGST Act is yet unsettled. Hence, it falls before this Court
to decide the present matter by exercising its discretion as
per intention of the Act along with analyzing the factors
necessary for the grant of anticipatory bail.
24. It is true to contend that the economic offences
are grave in nature however the same does not mean that
the bail needs to be denied in every case. The same has
been reiterated by the honourable Supreme Court in the
case of P. Chidambaram v. Directorate of Enforcement
(2020) 13 SCC 791 as follows :
"Thus, from cumulative perusal of the judgments cited
on either side including the one rendered by the
Constitution Bench of this court, it could be deduced that
the basic jurisprudence relating to bail remains the same
inasmuch as the grant of bail is the rule and refusal is the
28
exception so as to ensure that the accused has the
opportunity of securing fair trial. However, while
considering the same the gravity of the offence is an
aspect which is required to be kept in view by the court.
The gravity for the said purpose will have to be gathered
from the facts and circumstances arising in each case.
Keeping in view the consequences that would be fall on
the society in cases of financial irregularities, it has been
held that even economic offences would fall under the
category of 'grave offence' and in such circumstance
while considering the application for bail in such matters,
the court will have to deal with the same, being sensitive
to the nature of allegation made against the accused.
One of the circumstances to consider the gravity of the
offence is also the term of sentence that is prescribed for
the offence the accused is alleged to have committed.
Such consideration with regard to the gravity of offence
is a factor which is in addition to the triple test or the
tripod test that would be normally applied. In that regard
what is also to be kept in perspective is that even if the
allegation is one of grave economic offence, it is not a
rule that bail should be denied in every case since there
is no such bar created in the relevant enactment passed
by the Legislature nor does the bail jurisprudence provide
so. Therefore, the underlining conclusion is that
irrespective of the nature and gravity of charge, the
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precedent of another case alone will not be the basis for
either grant or refusal of bail though it may have a
bearing on principle. But ultimately the consideration will
have to be on case-to-case basis on the facts involved
therein and securing the presence of the accused to
stand trial."
25. In the present case, there cannot be any conflict
with the fact that petitioner has been charged with
economic offence. However, it is to be reiterated that the
offence does not contemplate punishment for more than
five years or commission of any serious offence along with
the economic offence as it is usually the case in offences
under other special statutes dealing with economic offences
like Prevention of Money Laundering Act, 2003. Thus, as
per the scheme of the CGST Act, though the offence is of
economic nature yet the punishment prescribed cannot be
ignored to determine the heinousness of the offence. To
conclude, in my view the offences under the Act are not
grave to an extent where the custody of the accused can be
held to be sine qua non.
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26. Before analysing the application for anticipatory
bail, it is essential to take note of the approach that is
expected from the High Courts in such applications as
observed by the honourable Supreme Court in the case of
Arnab Manoranjan Goswami v. State of Maharashtra (2021)
2 SCC 427:
"More than four decades ago, in a celebrated judgment
in State of Rajasthan v. Balchand (State of Rajasthan v.
Balchand (1977) 4 SCC 308 ; [1977] SCC (Cri) 594),
Krishna Iyer, J. pithily reminded us that the basic rule of
our criminal justice system is 'bail, not jail' (These words
of Krishna Iyer, J. are not isolated silos in our
jurisprudence, but have been consistently followed in
judgments of this court for decades. Some of these
judgments are : State of U. P. v. Amarmani Tripathi
(2005) 8 SCC 21 ; [2005] SCC (Cri) 1960 (2) and Sanjay
Chandra v. CBI (2012) 1 SCC 40 ; (2012) 1 SCC (Cri) 26 ;
(2012) 2 SCC (L&S) 397.
The High Courts and courts in the district judiciary of
India must enforce this principle in practice, and not forego
that duty, leaving this court to intervene at all times. We
must in particular also emphasise the role of the district
31
judiciary, which provides the first point of interface to the
citizen. Our district judiciary is wrongly referred to as the
'subordinate judiciary'. It may be subordinate in hierarchy
but it is not subordinate in terms of its importance in the
lives of citizens or in terms of the duty to render justice to
them. The High Courts get burdened when courts of first
instance decline to grant anticipatory bail or bail in
deserving cases. This continues in the Supreme Court as
well, when High Courts do not grant bail or anticipatory
bail in cases falling within the parameters of the law. The
consequence for those who suffer incarceration are
serious. Common citizens without the means or resources
to move the High Courts or this court languish as
undertrials. Courts must be alive to the situation as it
prevails on the ground in the jails and police stations
where human dignity has no protector. As judges, we
would do well to remind ourselves that it is through the
instrumentality of bail that our criminal justice system's
primordial interest in preserving the presumption of
innocence finds its most eloquent expression. The remedy
of bail is the 'solemn expression of the humaneness of the
justice system'. Tasked as we are with the primary
responsibility of preserving the liberty of all citizens, we
cannot countenance an approach that has the consequence
of applying this basic rule in an inverted form. We have
given expression to our anguish in a case where a citizen
32
has approached this court. We have done so in order to
reiterate principles which must govern countless other
faces whose voices should not go unheard."
27. The Constitution Bench judgment in the case of
Gurubaksh Singh Sibbia v. State of Punjab (1980) 2 SCC
565 has been serving as an encyclopedia for the cases in
relation to anticipatory bail. Therein, the court also called
for a similar approach when it observed :
"26. We find a great deal of substance in Mr.
Tarkunde's submission that since denial of bail amounts
to deprivation of personal liberty, the court should lean
against the imposition of unnecessary restrictions on the
scope of section 438, especially when no such restrictions
have been imposed by the Legislature in the terms of
that section. Section 438 is a procedural provision which
is concerned with the personal liberty of the individual,
who is entitled to the benefit of the presumption of
innocence since he is not, on the date of his application
for anticipatory bail, convicted of the offence in respect of
which he seeks bail. An over-generous infusion of
constraints and conditions which are not to be found in
section 438 can make its provisions constitutionally
vulnerable since the right to personal freedom cannot be
33
made to depend on compliance with unreasonable
restrictions. The beneficent provision contained in section
438 must be saved, not jettisoned.. . ."
28. The Honourable Supreme Court in the case of
Siddharam Satlingappa Mhetre v. State of Maharashtra
(2011) 1 SCC 694 concerning grant of anticipatory bail after
exhaustively analyzing the rights under article 21 held as
under :
"A great ignominy, humiliation and disgrace is attached
to the arrest. Arrest leads to many serious consequences
not only for the accused but for the entire family and at
times for the entire community. Most people do not make
any distinction between arrest at a pre-conviction stage or
post-conviction stage."
29. A three-judge bench of the Honourable Supreme
Court in the case of Nathu Singh v. State of U. P. (2021) 6
SCC 64 has called for a liberal interpretation in the cases
relating to grant of anticipatory bail, when it observed :
"19. At first blush, while this submission appears to be
attractive, we are of the opinion that such an analysis of
34
the provision is incomplete. It is no longer res integra that
any interpretation of the provisions of section 438 CrPC
has to take into consideration the fact that the grant or
rejection of an application under section 438 CrPC has a
direct bearing on the fundamental right to life and liberty
of an individual. The genesis of this jurisdiction lies in
article 21 of the Constitution, as an effective medium to
protect the life and liberty of an individual. The provision
therefore needs to be read liberally, and considering its
beneficial nature, the courts must not read in limitations or
restrictions that the Legislature have not explicitly
provided for. Any ambiguity in the language must be
resolved in favour of the applicant seeking relief.. . ."
30. Equally important is to take into considerations
the factors that the court ought to take into account while
granting or refusing anticipatory bail. In a judgment, the
Constitutional Bench of the Honourable Supreme Court had
the occasion to consider some important aspects of
anticipatory bail in the case of Sushila Aggarwal v. State
(NCT of Delhi) (2020) 5 SCC 1. The principal question
before the honourable court was whether the grant of
anticipatory bail operates for a limited time period or not.
35
The court analysed the concept of anticipatory bail at great
length and held as under :
"92.3 Nothing in section 438 CrPC, compels or obliges
courts to impose conditions limiting relief in terms of
time, or upon filing of FIR, or recording of statement of
any witness, by the police, during investigation or
inquiry, etc. While considering an application (for grant of
anticipatory bail) the court has to consider the nature of
the offence, the role of the person, the likelihood of his
influencing the course of investigation, or tampering with
evidence (including intimidating witnesses), likelihood of
fleeing justice (such as leaving the country), etc. The
courts would be justified and ought to impose conditions
spelt out in section 437(3) CrPC (by virtue of section
438(2)).
The need to impose other restrictive conditions, would
have to be judged on a case-by-case basis, and
depending upon the materials produced by the State or
the investigating agency. Such special or other restrictive
conditions may be imposed if the case or cases warrant,
but should not be imposed in a routine manner, in all
cases. Likewise, conditions which limit the grant of
anticipatory bail may be granted, if they are required in
36
the facts of any case or cases ; however, such limiting
conditions may not be invariably imposed.
92.4. Courts ought to be generally guided by
considerations such as the nature and gravity of the
offences, the role attributed to the applicant, and the
facts of the case, while considering whether to grant
anticipatory bail, or refuse it. Whether to grant or not is a
matter of discretion; equally whether and if so, what kind
of special conditions are to be imposed (or not imposed)
are dependent on facts of the case, and subject to the
discretion of the court."
31. The Hon'ble Delhi High Court in the case of Tarun
Jain vs. Directorate General of GST Intelligence DGGI
(2021 SCC Online Del 5733) considering the similar case
has observed as under:
52. In the present case, the petitioner has been
accused of wrongfully utilizing the input-tax credit
amounting to Rs. 72 crores, an offence under section
132(1)(b) and (c). Since the alleged amount exceeds
five hundred lakhs, the accused can be punished with a
maximum of five year of imprisonment and with fine. It
is equally important to highlight that the offences under
37
the Act are bailable and non-cognizable except for the
offence under section 132(5) of the Act. Additionally,
under section 135 of the Act, in any prosecution under
the Act requiring culpable mental state, the court is
bound to presume culpable mental state of the accused.
The section further states that the accused will have a
defense to prove that he had no such mental state.
Also, section 138 of the Act states that the offences
under the Act shall be compoundable either before or
after the prosecution.
53. The task before this court is two-fold, first being to
ensure that no unwarranted abuse of process is allowed
to impinge upon life and liberty of the petitioner, and
second to ensure that the investigation is not
hampered, procedure of administration of justice is not
adversely impacted and ultimately the guilty is
prosecuted.
54. These are competing interests included in an
anticipatory bail application, i.e., the liberty of the
accused and the interest of the investigative authorities
for discovering the particular of offence. It is the case of
the petitioner that he failed to appear due to his ill
health, which evidently no more exists. The other
ground pertains to apprehension of arrest, which can be
removed by allowing the present application. It is very
38
well possible that the respondent-Department might get
the information as required if the petitioner co-operates
with the authorities concerned and arrest might not be
necessary.
59. In view of these facts and circumstances and in
light of the provisions of law, this court is inclined to
allow the anticipatory bail application with some
stringent conditions in view of the prior conduct of the
petitioner.
32. In the present case, the petitioner has been
accused of wrongly utilizing input tax credit amounting to
Rs.31,62,57,181/- under Section 132(1)(b) and (c). Since
the alleged amount exceeds Rs.500 lakhs, the accused can
be punished maximum for five years of imprisonment and
with fine. Also Sectoin 138 of the Act states that the
offences under the Act shall be compoundable either before
or after the prosecution. It is very well possible that the
respondent - Department might get the information as
required if the petitioner co-operates with the authorities
concerned and arrest might not be necessary.
39
33. The custodial interrogation in the instant matter is
neither warranted nor provided for by the statute.
Detaining the petitioner in judicial custody would serve no
purpose rather would adversely impact the business of the
petitioner.
34. In view of these facts and circumstances and in
light of the provisions of law, this Court is inclined to allow
the anticipatory bail application with some conditions. In
the result, the following:
ORDER
The petition is allowed. In the event of arrest, the petitioner be released on bail on his furnishing personal bond in the sum of Rs.5,00,000/- (Rupees five lakhs only) with two solvent sureties of like amount to the satisfaction of the investigating officer/apprehending authority, with the following conditions:
40
(i) He shall co-operate in the investigation and appear before the investigating officer/apprehending authority as and when summoned;
(ii) He shall not indirectly or indirectly make any inducement, threat, or promise to any person acquainted with the facts of the case;
(iii) He shall provide his mobile number and keep it operational at all times ;
(iv) He shall drop a PIN on google map to ensure that his location is available to the investigating officer/apprehending authority to file an appropriate application for cancellation of the anticipatory bail granted;
(v) He shall commit no offence during the period he is on bail;
(vi) He shall surrender his passport before the investigating officer/apprehending authority and under no circumstances leave India without prior permission of the investigating officer/apprehending authority, and, if he does not possess any passport, he shall file an affidavit to that effect before the investigating officer/apprehending authority.41
If the breach of any of the above conditions is committed, it would be open to the investigating officer/apprehending authority to file an appropriate application for cancellation of the anticipatory bail granted.
Sd/-
(SHIVASHANKAR AMARANNAVAR) JUDGE DKB 42