Sri Aniket Sovasaria vs. Union Of INDIA

Facts

The petitioner, Aniket Sovasaria, a partner of M/s Aadi Enterprises, sought bail in connection with DGGI Case No. DGGI/INT/INTL/34/2025. He was arrested on January 23, 2025, and had been in judicial custody for 54 days. The Directorate General of Goods and Services Tax Intelligence (DGGI) alleged that the petitioner was involved in fraudulent issuance of fake invoices and passing on ineligible Input Tax Credit (ITC) amounting to Rs. 5.69 Crores by M/s Aadi Enterprise and Rs. 0.43 Crores by M/s Trident Consulting, without actual supply of goods, leading to a total GST evasion of Rs. 6.12 Crores. The DGGI also submitted that the petitioner is a habitual offender, having been previously arrested for a similar offense on February 11, 2021.

Held

The Court rejected the bail application of the petitioner. While acknowledging the petitioner's argument regarding the length of detention (54 days, nearing the mandatory 60 days for certain offenses) and noting that the alleged offenses are punishable with imprisonment up to five years and are compoundable in nature, the Court gave significant weight to the submissions of the GST authorities. The Court observed that the petitioner is the proprietor of the companies against whom allegations of GST evasion amounting to crores of rupees were made. Crucially, the Court noted the pendency of another case (Case No. 4473/2022) against the petitioner and concluded that the petitioner is a habitual offender who has indulged in committing the alleged offenses. Therefore, the Court was not inclined to grant bail.

Key Issues

1. Whether the petitioner is entitled to bail considering the length of detention and the nature of the alleged offences under Section 132(1)(b) and 132(1)(i) of the CGST Act, 2017? Petitioner's arguments: The petitioner argued that he has been in judicial custody for 54 days, and Section 132(1)(b) of the CGST Act, 2017, is not attracted. He contended that considering the length of detention and the background of the case, he should be enlarged on bail. Revenue's arguments: The respondent (Union of India/DGGI) strongly objected to granting bail. They submitted that the petitioner was involved in fraudulent issuance of fake invoices and passing on ineligible ITC, leading to significant GST evasion. Furthermore, they argued that the petitioner is a habitual offender, having been arrested previously for a similar offense, and the investigation is still ongoing, thus bail should not be considered at this stage.