Atul Modi vs. Directorate General Of Goods And Service Tax Intelligence

By virtue of the present petition under Article 226 of the Constitution of India, the petitioner seeks setting aside of the order dated 02.02.20261 passed by the learned JMFC, Patiala House Courts, New Delhi2 in Ct No.541/2022 entitled ‘DGGI, Delhi Zonal Unit vs. Shyan Sunder Modi & Ors.’ arising out of File No.DZU/INV/H/GST/1140/2020 under Section 132(1)(c) of the Central Goods and Services Tax Act, 20173, whereby his application seeking renewal of his Passport has partly been allowed for a period of three years instead of ten years.

Succinctly put, it is the case of the prosecution that one M/s. Modi Infosol Pvt. Ltd. having GSTIN: 07AADCM4507G1ZP allegedly claimed ineligible Input Tax Credit of approximately Rs.7.72 Crores under the CGST Act on the strength of fictitious purchase invoices issued by one M/s. Smartgen Infra Pvt. Ltd. having GSTIN: 07AASCS78041ZW against computer related supplies like scanners, webcams, LED TVs, etc., which was found non-existent at its registered address on 21.09.2020 on a visit by the officers of the Directorate General of GST Intelligence, Delhi Zonal Unit. The said fictitious invoices amounting to Rs.42.94 Crores were seized during a subsequent search of the registered address of M/s. Modi Infosol Pvt. Ltd. on 25.11.2020. Thereafter, the statements of both the Directors, who are the petitioner and the co-accused herein, were recorded, and they were arrested on 27.11.2020 under Section 69 CGST Act.

On 08.01.2021, the learned Trial Court granted bail to both the petitioner as well as the co-accused, subject to the following conditions:- “1. That both the accused persons shall join the investigation as and when directed by the investigating agency.

That both the accused shall not tamper with the evidence or influence the witnesses which will be examined by the department during investigation.

That both the accused parsons shall not leave the country without the permission of the Court and deposit his passport with the IO within seven days.

That both the accused persons shall not indulge in similar offence in future.

That both the accused persons shall appear before the Court on each and every date of hearing.” [Emphasis supplied]

After surrendering his Passport in pursuance thereof, it was released to him by the learned Trial Court on 02.02.2024 in the following terms:-

Thereafter, since the Passport of the petitioner was valid only till March, 2026, and since as per the Notification of the Ministry of External Affairs dated 25.08.1993, due to pendency of criminal proceedings against the petitioner, his Passport could only be renewed on a no-objection of the concerned Court, that too only for the period specified therein, and if no such period was specified, then for a period of one year, he moved an application before the learned Trial Court seeking renewal of his Passport for a period of ten years, which was disposed of vide the impugned order passed by the learned Trial Court with the following directions:- “In view of the submissions of the applicant, the application of the accused no.2/ applicant i.e Atul Modi is partly allowed for 3 years instead of 10 years subject to following conditions: Digitally Signed By:BABLOO SHAH Signing Date:20.08.2026 17:32:49 Signature Not Verified

In these facts, in the challenge thereto, learned counsel for petitioner primarily submitted before this Court that though the learned Trial Court was empowered to order renewal of the Passport of the petitioner for full period of ten years but the same has been directed for a limited period of three years only. This, according to the learned counsel, would cause undue hardship to the petitioner, especially, since he is involved in a business dealing with manufacturing and importing requiring frequent overseas travel for exhibitions, meetings, conferences, etc. In support thereof, the learned counsel drew attention of this Court to the Additional Affidavit dated 05.08.2026 filed by the petitioner pursuant to order dated 02.07.2026 passed by this Court, and submitted that the petitioner is specifically expecting to travel to USA for one IT related CES Event 2027 scheduled to take place there in January, 2027. 7. Learned counsel also relied upon the decisions of Co-ordinate Benches of this Court in Deepak Jain vs. Union of India & Ors.4, 4 Order dated 08.10.2018 in W.P.(C) 10680/2018 5 2023:DHC:6286 Digitally Signed By:BABLOO SHAH Signing Date:20.08.2026 17:32:49 Signature Not Verified

Learned SSC, per contra, submitted that a loss of Rs.7.72 Crores has been incurred by the Government Exchequer, of which the petitioner and the co-accused have only deposited Rs.7 Lacs under Section 74(5) CGST Act, and since the outstanding liability is huge, there are chances of the petitioner absconding and fleeing the country.

Heard and perused the record as well as the judgements cited at Bar.

As apparent from above, the petitioner is permitted to travel abroad, however, only after obtaining prior permission of the Court in compliance of the conditions imposed upon him vide order dated 08.01.2021, when he was granted bail by the learned Trial Court. In fact, the learned Trial Court, while releasing the Passport of the petitioner vide order dated 02.02.2024, has also imposed an additional safeguard by calling upon the concerned IO/ Immigration/ Foreign Regional Registration Office to take necessary steps to ensure compliance of the said condition.

In view of the aforesaid, there are sufficient safeguards/ measures to keep a check on the petitioner though he may be the holder of a valid Passport, and the term of renewal thereof, be it for a limited period of three

Besides the above, records reveal that the petitioner has also submitted that his entire family, residence, business and several immovable properties are situated within India, which also significantly takes away the risk of his absconding.

In such circumstances, the impugned order for renewal of the petitioner’s Passport for a period of three years only, is liable to be modified. More so, since there are no plausible reasons/ substantive harm/ reasonable apprehensions to put the said bar upon the petitioner by renewing his Passport for the limited period of three years only.

Resultantly, and in the interest of justice, the present petition is allowed and the impugned order dated 02.02.2026 passed by the learned JMFC, Patiala House Courts, New Delhi is modified to the extent that the Passport of the petitioner be renewed for regular term of ten years.

Needless to say, all the other terms and conditions imposed vide the said impugned order dated 02.02.2026 shall remain the same, and binding upon the petitioner at all times.

Accordingly, the present petition along with the pending applications, is disposed of in the aforesaid terms.