Smti Santoshi Rai vs. The State Of Ap

Held

The Court rejected the bail application, finding that the allegations pertained to fraudulent transactions totaling Rs. 1,09,11,404/- using the complainant's GST account credentials. The Court noted that the accused, along with a co-accused, met the complainant and discussed business, after which the complainant provided his GST User ID and Password. Prima facie, the Court found that the accused persons used these credentials for fraudulent transactions. Regarding the legality of the arrest, the Court found from the records that the provisions of law concerning arrest and transit remand were duly complied with by the arresting authority, contrary to the petitioner's submission. The Court also held that a preliminary inquiry might not be required if a cognizable offense is found to have been committed. Therefore, considering the alleged involvement of the accused in fraudulent invoice transactions and the involvement of multiple individuals, the Court concluded that the accused was not entitled to bail at this stage.

Facts

This case involves a bail application filed by Smti Santoshi Rai on behalf of her husband, Shri Ravi Rai, who was arrested on September 3, 2025, in connection with Naharlagun P.S. Case No. 83/2025. The FIR was registered on June 28, 2025, based on a complaint by Shri Tajo Parang, proprietor of M/s JZ Enterprise. The complainant alleged that Shri Ravi Rai and Shri Harka Bahadur Sunar used his firm's GST User ID and Password to facilitate fraudulent transactions involving Input Tax Credit (ITC) amounting to Rs. 1,09,11,404/-. The ITC was allegedly received from M/s SK Enterprises and M/s Nagar Trades and subsequently sold to M/s Ananth Enterprises and M/s Jerang Enterprises. The complainant stated he provided his credentials for genuine work, but the accused allegedly misused them for fraudulent purposes, leading the GST office to block the input amount.

Key Issues

1. Whether the arrest and detention of the accused, Shri Ravi Rai, were illegal due to alleged non-compliance with mandatory provisions regarding arrest outside jurisdiction and transit remand, thereby violating Article 21 of the Constitution of India? (Question of law) 2. Whether the accused, Shri Ravi Rai, is entitled to bail given the allegations of fraudulent GST transactions and his alleged involvement? Petitioner's arguments: The petitioner's counsel argued that the GST User ID, Password, and OTP are solely with the complainant, implying no role for the accused. They contended that the accused is falsely implicated, has no relation to the firms, and no knowledge of the fraudulent transactions. Furthermore, the arrest was allegedly illegal, violating the Supreme Court's directive in Lalita Kumari v. Government of U.P. regarding preliminary inquiry and mandatory guidelines for arrest outside jurisdiction and transit remand. The object of bail, they asserted, is not punitive or preventive, and deprivation of liberty is a violation of Article 21. Respondent's arguments: The State argued that the accused is not cooperating with the investigation and poses a risk of influencing witnesses or hampering the investigation if released on bail. They asserted that there is prima facie material indicating the accused, along with co-accused, obtained the complainant's GST ID and Password for fraudulent transactions, making him disentitled to bail at this stage.