Krishnamohan Vishvkarama vs. UOI Min. Of Finance Revenue Directorate Gen. Of GST Intelligence Lko. Thru. Its Sr. I. Officer

Facts

This is a bail application filed by Krishnamohan Vishvkarama, the applicant, against the Union of India, represented by the Directorate General of GST Intelligence (DGGI). The applicant is accused of being the mastermind behind creating a nexus of fake firms to pass on fake Input Tax Credit (ITC) to recipients, as per Complaint Case No. 2553 of 2025, DGGI Case No. DGGI/INV/GST/3169/2024-GR-H. The alleged offenses fall under Section 132(1)(b) and (c) of the CGST Act, 2017. The applicant has been in incarceration since November 14, 2024. The prosecution alleges his complicity based on documents unearthed during searches. The applicant contends he is falsely implicated and his role was limited to filing Income Tax and GST returns for clients. The trial has not yet commenced, and the applicant highlights the presence of 11 witnesses as a factor indicating a delayed conclusion.

Held

The Court allowed the bail application. It acknowledged that the applicant is accused of creating fake firms for fraudulent Input Tax Credit, and the extent of his involvement, including signatures or instrumental role, is a matter of evidence. The Court noted the admission that the maximum sentence is five years and that the applicant has been in custody since November 14, 2024, with the investigation concluded. Citing the Supreme Court's pronouncements in *Sanjay Chandra v. Central Bureau of Investigation* and *Satender Kumar Antil v. Central Bureau of Investigation*, which emphasize that bail is the norm and deprivation of liberty should not be punitive, the Court found that the applicant is entitled to bail. The reasoning hinges on the fact that the trial has not commenced, the maximum sentence is five years, and the applicant's alleged role is subject to evidence. The applicant was released on furnishing a personal bond and two sureties, with stringent conditions imposed to ensure his presence during trial and prevent misuse of liberty.

Key Issues

1. Whether the applicant is entitled to be released on bail, considering the allegations of creating fake firms for fraudulent Input Tax Credit and the stage of the trial? Petitioner's Arguments: The applicant's counsel argued that the applicant has been falsely implicated and lacks evidence of his involvement in creating fake firms. They emphasized that the complaint itself attributes his role solely to filing Income Tax and GST returns for clients. Furthermore, the applicant has been in custody since November 14, 2024, and with 11 witnesses listed, an early conclusion of the trial is unlikely. Reliance was placed on Supreme Court judgments in *Satender Kumar Antil v. Central Bureau of Investigation & Another* and *Sanjay Chandra v. Central Bureau of Investigation*. Revenue's Arguments: The counsel for the DGGI opposed the bail application, submitting that evidence collected during raids clearly indicates the applicant's complicity in creating fake firms for fraudulent ITC. They admitted that the maximum sentence for the alleged offenses is five years but had no information regarding the current status of the trial.