Narinder Kumar Joshi vs. Director General Of Goods And Service Tax Intelligence

CRM-M-5987-2025 (O&M)

CRM-M-6019-2025 (O&M)

Adumbrated facts as emanating from the record and relevant for the purpose of disposal of these petitions are that on receipt of an information in the office of the respondent-Directorate General, Goods & Service Tax Intelligence to the effect that a fictitious firm was formed under the name of M/s Dashmesh Traders, which was having GST No. 02BWAPS5236F1ZT, and this firm was engaged in availing and passing on fraudulent Input Tax Credit (for short ‘ITC’), investigation was initiated by the respondent in order to ascertain the genuineness of the firm and its business. It was revealed that the firm was registered at a fictitious address by misusing false and fabricated documents. It was further revealed that one of the major beneficiaries in the transactions conducted through the firm was one M/s NK Gupta Builders Pvt. Ltd. Sahil Gupta, Director of the above company, was contacted and he recorded his statement that one Sandeep Garg was acting as a middleman for generating good less invoices and procuring them from M/s Dashmesh Traders. Aforesaid Sandeep Garg was proprietor of a firm named M/s Pashupati Enterprises, who, on being questioned, recorded a statement that good less invoices along with e-way bills and liabilities issued from M/s Dashmesh Traders had been provided to him by the petitioner Narinder Kumar Joshi to M/s NK Gupta Builder Pvt. Ltd.

As per the further allegations, the respondent conducted a search in the office of the petitioners and recovery of unaccounted cash to the tune of MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

2024. The trial would take considerable time to conclude. The 2025.05.27 16:03 I attest to the accuracy and integrity of this document

The respondent has filed replies resisting the claims made by the petitioners. Learned counsel for the respondent has vehemently argued that the petitioners in connivance with each other have evaded tax liability of huge amount of money and passed fake ITC and caused hefty loss to the government exchequer by incorporating fake and bogus firms. There are serious allegations against them. They themselves recorded statements admitting about creating fake firms. Evidence has been collected during investigation to show their active involvement by way of transfer of funds in and out of the personal banks account of the petitioners and co-accused Mohit @ Bacha Rai, 2017 (3) RCR CRL 690, Bhagyabati Rout vs. State of Odisha, (Orissa), 2017 (4) BC 377, Pravat Ranjan Biswal vs. Republic of India, (Orissa), 2018 (70) ORRISA CRI R. 402, Lt. Col. (Retd.) Rakesh Rana, KC MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

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.— MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 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 MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

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:

tampering with the evidence. The Hon’ble Supreme Court has observed as under : “The grant or refusal to grant bail lies within the discretion of the court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction, to assure that he will submit to the juri iction of the court and be in attendance thereon whenever his presence is required. X XXX XXX

We are conscious of the fact that the accused are MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 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 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 MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

Now, let us refer 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 MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

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 (supra), the petitioner was in custody for a period of 06 months for commission of offence punishable under Section 132 of the CGST Act. While considering that the maximum sentence which would be awarded was 05 years and that the trial was likely to take time, Hon’ble Supreme Court directed the appellant to be released on bail. Reliance can also be placed upon a recent pronouncement of Hon’ble Supreme Court in Vineet Jain’s case (supra), wherein a person accused of committing offence under Section 132(1) of the CGST Act was denied grant of bail. The Hon’ble Supreme Court allowed the appeal filed by the accused by taking into consideration the fact that he was in custody for a period of 07 months, chargehseet had been filed and that the offence carried maximum punishment for 05 years of imprisonment. While granting bail to the accused, the Hon’ble Supreme Court had made following observations: “We are surprised to note that in a case like this, the MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

Similar observations were made by the co-ordinate Benches of this Court in Deepak Sharma’s case (supra), Parteek Das Gupta’s case (supra), Amit Bansal’s case (supra), Tejpal Singh’s case (supra) and Sunil Mahlawat’s case (supra).

So far as the reliance placed by the learned Senior Panel Counsel for the respondent on the judgements rendered in Amit Kumar @ Bacha Rai’s case (supra), Bhagyabati Rout’s case (supra), Pravat Ranjan Biswal’s case (supra), Lt. Col. (Retd.) Rakesh Ranjan’s case (supra), Sameer’ s case (supra) and Braja Sundar Mishra’s case (supra) is concerned, undoubtedly all these cases were relating to economic offences and prayer for grant of bail had been denied. However, these cases are distinguishable on the point that in all these cases, punishment of imprisonment was upto life. In Swetanga Pattnaik’s case (supra), the bail had been denied since investigation was still pending. In P. V. Ramana Reddy’s case (supra), challenge was to summons issued under Section 70 of the GST Act and invocation of penal provisions. A Division Bench of Telangana High Court by observing that the GST regime was at its nascent stage since the law was yet to reach its second anniversary and that there were lot of technical glitches in furnishing of returns and making of ITC claims etc. had rejected the prayer and the order was upheld by the Hon’ble Supreme Court. However, there was no prayer for grant of bail. In Sundeep MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

Further, in Mohanlal Jitamalji Porwal’s case (supra), the question was qua additional evidence in a case registered under the provisions of Customs Act, which too has no applicability to the present case. In Y. S. Jagan Mohan Reddy’s case (supra), the accused was booked for commission of offence under the Prevention of Corruption Act. Prayer for grant of bail was rejected as investigation had not completed and challan had not been presented. In Adri Dharan Das’s case (supra), prayer was for grant of bail in a case registered under the provisions of Sections 406, 467, 468, 471 and 420 of IPC, which carried the maximum punishment up to life. In Suresh Kumar P. P.’s case (supra), the prayer was not for grant of bail. Rather, it was an appeal against the dismissal of a writ petition filed by the appellants challenging the provisions of CGST Act. In Rakesh Arora’s case (supra), the prayer for grant of bail was declined as the investigation was going on and even complaint had not been filed and that the petitioner had undergone custody of only 01 month. In Ashish Jain’s case (supra), summons issued under the provisions of CGST Act had been challenged.

As such, the citations relied upon by the learned counsel for the MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 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 MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

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 concession of bail granted to the petitioners shall be further subject to following conditions: (a) They shall deposit their passports, if any, before the learned trial Court; (b) They shall cooperate in trial without seeking any unnecessary adjournments; (c) They shall not tamper with the prosecution evidence by intimidating or pressurizing the witnesses during trial; (d) They shall not dispose of any of their property or of the firms/companies in which they have substantial interest and which are also under investigation; (e) They shall not indulge in any criminal activity or in commission of any crime after being released on bail. (f) They shall provide the details of their Aadhar Card as well as their contact numbers to the trial Court.

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 MOHAMMAD WASEEM ANSARI 2025.05.27 16:03 I attest to the accuracy and integrity of this document

This order shall come into force from the time it is uploaded on this Court’s official webpage.

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

2025