Yogesh Kumar Goyal vs. Directorate General Of GST Intelligence (Dggi)

Held

The Court confirmed the interim bail granted to the petitioners. The reasoning was based on the petitioners having been in custody for 70 days, the filing of complaints against them, and the primarily documentary nature of the evidence, which meant their custodial interrogation was no longer required. The Court acknowledged the legal issues raised, particularly concerning the compounding of tax liability under Section 138 of the CGST Act and its implications on arrest, but stated that these issues would be left open for decision in other appropriate proceedings. The order dated September 30, 2021, granting interim bail, was made absolute until the trial or until the complaint is quashed. The petitioners were granted liberty to raise the legal issues in other appropriate proceedings. The Court did not decide the broader legal questions regarding compounding and arrest.

Facts

The petitioners, Yogesh Kumar Goyal and Krishan Kumar Bansal, sought regular bail in an investigation by the Directorate General of GST Intelligence (DGGI) under Sections 132(1)(b) and (c) of the CGST Act, 2017. The DGGI alleged that M/s. Jetibai Grandsons Services India Pvt. Ltd. (JGSIPL), along with other firms including M/s. Urja Global Limited (Urja) where petitioner Goyal is a Director, fraudulently availed and passed on ineligible/fake Input Tax Credit (ITC). Urja purportedly showed purchases of Battery, Solar Panel, and Job Work Services from various firms, including non-existent ones. The DGGI claimed that Urja availed and fraudulently passed on ITC amounting to ₹17.2 crores to JGSIPL between November 2020 and March 2021. The petitioners had been in custody for 70 days when the bail applications were heard. A complaint was filed on the 60th day, after court hours.

Key Issues

1. Whether the petitioners are entitled to regular bail given their custody period of 70 days, the filing of a complaint against them, and the documentary nature of the evidence, considering the provisions of Section 167 CrPC. 2. Whether the possibility of compounding tax liability under Section 138 of the CGST Act at any stage, even before prosecution, impacts the necessity of arrest of an assessee. Petitioner's Arguments: The petitioners argued that they had been in custody for 70 days. They contended that the complaint was filed hurriedly after court hours on the 60th day to frustrate their right to bail under Section 167 CrPC. They also pointed out that while a complaint was filed against individuals, no complaint was filed against the company, despite the company being the entity allegedly involved in tax deposit, ITC availing, or evasion. Respondent's Arguments: The respondent (DGGI) initially pursued the investigation. However, upon the filing of the complaint and cognizance being taken, the respondent stated they had instructions not to object to the confirmation of the interim bail order, leaving the legal issues open for future determination.