Dharmendra Agarwal vs. The Union Of INDIA And 2 Ors
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The petitioner, Dharmendra Agarwal, filed a writ petition challenging proceedings initiated against him under Section 132(1)(c) of the CGST Act, 2017, and his subsequent arrest on December 12, 2024. The allegation is that the petitioner availed input tax credit (ITC) without actual receipt of goods, using false or forged bills. The Directorate General of Goods and Services Tax Intelligence (DGGI) Guwahati Zonal Unit initiated the proceedings. The petitioner was detained in custody since his arrest. The High Court, after hearing arguments and considering cited judgments, had previously granted interim bail to the petitioner on January 9, 2025, subject to certain conditions. It is submitted that the investigation has been completed and a report filed, with no violation of the interim bail conditions by the petitioner.
Held
The Court disposed of the writ petition by making the interim order dated January 9, 2025, absolute. The interim order had directed the petitioner's release on interim bail, subject to furnishing personal and bail bonds and adhering to specific conditions. These conditions included appearing before the Investigating Officer as required, not moving out of his known address without permission, not inducing or threatening any person acquainted with the facts, not tampering with evidence, not obstructing the investigation/trial, and not misusing his liberty. The Court noted that the investigation had been completed, a report submitted, and there were no allegations of the petitioner violating the interim bail conditions. The Court explicitly stated that the order and the interim order should not be treated as a comment on the merit of the allegations by the GST authorities or the contentions raised by the petitioner.
Key Issues
1. Whether the proceedings initiated under Section 132(1)(c) of the CGST Act, 2017, and the subsequent arrest of the petitioner are legally sustainable, considering the allegations of availing ITC without actual receipt of goods using false/forged bills? (Question of law) Contentions: Petitioner: Argued that the proceedings and arrest were initiated based on allegations of availing ITC without actual receipt of goods using false or forged bills, which falls under Section 132(1)(c) of the CGST Act, 2017. The petitioner relied on judgments such as Arnab Manoranjan Goswami vs State of Maharashtra, Daulat Samirmal Mehta vs Union of India & Others, and Sunil Kumar Jha vs Union of India & Ors. Revenue/State (DGGI): The specific arguments of the revenue are not explicitly detailed in the provided text, beyond the fact that they initiated proceedings under Section 132(1)(c) of the CGST Act, 2017, and opposed the petitioner's plea, leading to the arrest.
Sections Cited
Section 132(1)(c), Section 69
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Cause title — parties, addresses and appearances
O R D E R
2025
Heard BK Mahajan, learned counsel for the petitioner. Also heard Mr. SC Keyal, learned standing counsel for GST.
This writ petition is directed against the proceedings initiated against the petitioner vide Case No. DGGI/INT/INTL/1362/2024 under Section 132 (1)(c) of the Central Goods and Services Tax, (CGST) Act, 2017 as well as the subsequent arrest of the petitioner, who has been detained custody since 12.12.2024. 3. This court after hearing the learned counsel for the parties recorded that the allegation against the petitioner is that he has availed of input tax credit by without actual receipt of the good and thereby availed benefit of input tax credit by using false or forged bill and is therefore, guilty of the offences prescribed under Section 132 (1)(c) and therefore punishable under Clause (I) of the said section.
Thereafter, after elaborate discussion of provisions of law and the judgment cited at bar including sub-section 1 of Section 69 and the determinations made in 1, Daulat Samirmal Mehta vs Union of India & Others, reported in 2021 SCC OnLine Bom 200 Division Bench and Sunil Kumar Jha vs Union of India & Ors. [WP(ST) No. 5484/2021], while issuing notice of motion passed the following orders on 09.01.2025:
Page No.# 3/4 “Accordingly, the petitioner is directed to be released on interim bail subject to furnishing personal bond of Rs. 1 Lakh as well as execute a bail bond of Rs. 1 Lakh with two local sureties of the like amount to the satisfaction of the learned Chief Judicial Magistrate, Kamrup (M) and the subject to following conditions: (1) That the accused-petitioner shall appear before the Investigating Officer as and when required and co-operate with the investigation, till investigation is complete; (2) He shall not change or move out of his known address without written permission of the I.O. (3) That the accused-petitioner shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to Court or to any police office or tamper with the evidence. He shall not, in any manner, try to influence or intimidate the prosecution witnesses. (3) That the accused-petitioner shall not obstruct the progress of the investigation/trial. And (4) That the accused-petitioner shall not misuse his liberty in any manner.”
It is submitted at the bar that already investigation has been completed and report has been submitted. This court has also not found any allegation of any violation of the conditions stipulated in the interim order dated 09.01.2025. 6. Therefore, in the fitness of things and as agreed to by the learned counsels for the parties, the present writ petition stands disposed of making the aforesaid interim order dated 09.01.2025 absolute.
It is needless to say that the present order and the order dated 09.01.2025 shall not be treated as a comment on the merit of the allegation of the GST authorities as well as on the merit of the contention raised by the writ petitioner in the present
Page No.# 4/4 writ petition.
This disposes the writ petition
JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.