Shivam Gupta vs. State Of Punjab And Others

CRM-M-503-2026 (O&M)

CRM-M-2739-2026 (O&M)

It is argued by learned Senior counsel appearing for petitioner Shivam Gupta as well as by learned counsel appearing for petitioner Vaishno Dass that they have been falsely implicated in this case without taking into account the true facts. It is further argued that M/s Vasu Multimetals Pvt. Ltd. and M/s SVM Multimetals Pvt. Ltd. are duly incorporated companies engaged in the legitimate business of melting scrap for manufacture of ingots and in scrap trading. The said business activities are lawful and have been carried on in the ordinary course of commercial operations. It is further argued that petitioner Vaishno Dass was serving as a Director in the aforesaid companies and petitioner Shivam Gupta was appointed as a Director in M/s Vasu Multimetals Pvt. Ltd. on 22.09.2022 and in M/s SVM Multimetals Pvt. Ltd. on MOHAMMAD WASEEM ANSARI 2026.02.23 18:51 I attest to the accuracy and integrity of this document

2021. Mere holding of the position of Director, in the absence of any specific role or overt act attributed to the petitioners, does not attract criminal liability. The petitioners were not involved in the day-to-day affairs or operational management giving rise to the alleged transactions and no material has been placed on record to show their direct participation, mens rea or conscious involvement in the commission of any alleged offence. With regard to M/s Ingottastic LLP, it is submitted that petitioner Vaishno Dass and Harshbir Singh Sokhi are partners therein. However, the said LLP is a separate legal entity and its business activities are independent and distinct from those of the respondent companies. No nexus has been established between the alleged acts and the petitioners merely on account of their association with the said LLP. The allegations levelled in the complaint, even if taken at face value, do not disclose the essential ingredients of the offences alleged against the petitioners. It is further argued that the procedural safeguards under Section 41(1) of the Code of Criminal Procedure were not complied with and as such, the arrest of the petitioners is in violation of Articles 14 and 21 of the Constitution of India. There was no circumstance appearing on record justifying the necessity of their arrest. The provisions of Section 73 and 74 of the CGST Act had not been followed. No reasonable satisfaction had been recorded. The prosecution case rests on vague and omnibus allegations without specific attribution of criminal conduct, rendering the continuation of proceedings against the petitioners an abuse of the process of law. They are in custody since long. The maximum punishment to be awarded to them in case of conviction is 05 years. They are ready to abide by the terms and conditions to be imposed upon them by this Court for grant of bail. It is, therefore, urged that the petitions deserve to be allowed and the petitioners deserve to be MOHAMMAD WASEEM ANSARI 2026.02.23 18:51 I attest to the accuracy and integrity of this document

It is further argued that the arrest of the petitioners was effected after collecting evidence and conducting thorough inquiry as well as after obtaining requisite sanction from the Principal Commissioner under Section 69(1) of the CGST Act. The grounds of arrest were duly communicated to them. All the constitutional and legal safeguards were complied with and, therefore, it is urged that there was compliance of all the mandatory provisions and the plea that the arrest was liable to be vitiated for want of proper adjudication is not tenable. Reliance has been placed upon Radhika Aggarwal’s case (supra), wherein the Hon’ble Supreme Court observed that normally it would be mandatory to conclude assessment proceedings under MOHAMMAD WASEEM ANSARI 2026.02.23 18:51 I attest to the accuracy and integrity of this document

It is further argued that there are chances of the petitioners fleeing or tampering with the record, if extended benefit of bail. There is no illegality or infirmity in the orders passed by the Courts of learned Chief Judicial Magistrate, Ludhiana and learned Additional Sessions Judge, Ludhiana declining the prayer of the petitioners for grant of bail. It is, thus, argued that under the given circumstances, the petitioners are not entitled to get indulgence of bail by this Court and the petitions are liable to be dismissed.

This Court has heard the rival submissions.

Before proceeding to decide the prayer made by the petitioners for grant of bail, it would be apt to have a look at the relevant statutory provision contained in Section 132 of CGST Act, which read as under :

Punishment for certain offences.— (1) Whoever commits 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 MOHAMMAD WASEEM ANSARI 2026.02.23 18:51 I attest to the accuracy and integrity of this document

A bare perusal of the above mentioned provision leaves no room to doubt that the offences alleged carry minimum punishment of 06 months and a maximum punishment of 05 years of imprisonment. Further, Section 138 of the CGST Act is relevant, as per which, the offences under Section 132 of the Act are compoundable.

The law regarding grant of bail has been discussed in several pronouncements of Hon’ble Supreme Court. It will be apposite to refer to U.P. and another, (2018)3 SCC 22, wherein Hon’ble Supreme Court had reiterated the law of bail as follows:

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We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge-sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI.”

Similar observations were made by Hon’ble Supreme Court in P. 2026.02.23 18:51 I attest to the accuracy and integrity of this document

In view of the above discussion, it emerges that the position of law regarding grant of bail is that the basic jurisprudence relating to bail in economic offences remains the same in as much as the grant of bail is the rule and its refusal is the exception, so as to ensure that an accused has the opportunity to get fair trial. However, at the same time, it is not advisable to categorize all the economic offences into one group and deny bail on that basis. While considering the question of grant of bail, the gravity of offences is an aspect, which is required to be taken into consideration. The gravity has to be gathered from the facts and circumstances having arisen in each case. One of such circumstances is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. While considering the prayer for grant of bail in any offence, including economic offences, it is not a rule that bail should be denied in every case where the allegation is one of grave economic offences since there is not such bar created in the relevant enactment passed by the Legislature nor does the jurisprudence provide so. The broad parameters to be considered while deciding prayer of an accused for grant of bail can be enumerated as under : (i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence; (ii) nature and gravity of the charge; (iii) severity of the punishment in the event of conviction; (iv) danger of accused absconding or fleeing if released on bail; (v) character, behaviour, means, position and standing of the accused; (vi) likelihood of the offence being repeated; (vii) reasonable apprehension of the witnesses being tampered with; and (viii) danger, of course, of justice being thwarted by grant MOHAMMAD WASEEM ANSARI 2026.02.23 18:51 I attest to the accuracy and integrity of this document

Reference may now be made to the citations relied upon by the petitioners in support of their prayer for grant of bail. In Ratnambar Kaushik’s case (supra), the High Court had dismissed an application filed by the accused for grant of regular bail in the proceedings for the offences alleged against him under Sections 132(1) read with Section 132(5) of the CGST Act. While observing that the alleged evasion of tax by the accused was to the extent as provided under Section 132(1)(i) and the punishment provided was imprisonment which might extend to 05 years and fine, the fact that the accused had already undergone incarceration for 04 months and completion of trial was likely to take time and further that the evidence to be tendered was of documentary nature, the Hon’ble Supreme Court had passed an order for release of the accused on bail. In Ashutosh Garg’s case (supra), the High Court of Judicature for Rajasthan at Jaipur had dismissed the prayer made by the petitioner, who was accused of creating and operating 294 fake firms and evaded tax liability of Rs.1032 crores. The Hon’ble Supreme Court allowed the Special Leave Petition filed by the accused by taking into consideration the fact that he was in custody for a period of 09 months and that the offence carried maximum punishment for 05 years of imprisonment. It was observed that it was not appropriate to keep him in custody any further.

Further, in Vipin Garg alias Bindu’s case (supra), there was allegation of misuse of ITC leading to loss of State exchequer. Chargesheet had been submitted. It was observed by Hon’ble Supreme Court that though heavy loss to the exchequer was alleged to be caused by the accused and no recovery had been effected but further detention of the accused during trial was not necessary and he was extended benefit of bail. In Yash Goyal’s case MOHAMMAD WASEEM ANSARI 2026.02.23 18:51 I attest to the accuracy and integrity of this document

Similar observations were made by this Court in Deepak Sharma’s case, Parteek Das Gupta’s case, Amit Bansal’s case, Tejpal Singh’s case and Sunil Mahlawat’s case, Pawan’s case, Dipanshu Anand’s case, Sovit’s case, Mohit Singla’s case and Manish Kumar’s case (supra).

Now adverting to the present case. The allegations against the petitioners are that while being Directors/partners of M/s Vasu Multimetals Pvt. Ltd., M/s SVM Multimetals Pvt. Ltd. and M/s Ingottastic LLP, they had knowingly availed and utilized fraudulent Input Tax Credit to the tune of ₹53 MOHAMMAD WASEEM ANSARI 2026.02.23 18:51 I attest to the accuracy and integrity of this document

On consideration of the above discussed facts and circumstances and also considering that the alleged offences are punishable with maximum punishment up to 05 years and also keeping in view that in such circumstances, the further detention of the petitioners may not at all be justified since in case of this nature, the evidence to be rendered by the respondent would essentially be documentary and electronic, which will be through official witnesses, due to which, there cannot be any apprehension of tampering, intimidating or influencing the witnesses and further as it appears justified to strike a fine balance between the need for further detention of the petitioner when no custodial interrogation has been claimed at all by the department, this Court considers that the petitioners are entitled to be released on bail but subject to certain conditions.

As a result of above discussion, the petitions moved by both the petitioners are hereby allowed and they are ordered to be released on regular bail on their furnishing personal bonds with two sureties in the like amount each to the satisfaction of the Court concerned/Duty Magistrate. The MOHAMMAD WASEEM ANSARI 2026.02.23 18:51 I attest to the accuracy and integrity of this document

Breach of any of the above conditions shall be a ground for cancellation of bail granted to the petitioners.

It is made clear that the observations made herein above are only for the purpose of deciding the present petitions and the same shall not be construed as an expression of opinion by this Court on the merits of the case.

Let a photocopy of this order be placed on the file of the connected case.

2026