Jagdish S/O Amraram vs. Union Of INDIA

Held

The Court dismissed the bail applications. It held that while bail should normally be granted for offences under Section 132 of the CGST Act, extraordinary circumstances exist in this case. The Court noted the GST evasion of approximately Rs. 95 Crores, which has significant economic implications. It characterized the case as a white-collar crime, with the petitioners falling under the ambit of "supplier" of taxable supplies related to online money gaming. The Court found that the applicant-Manoj suppressed supply by not declaring it in statutory returns and deliberately furnished false information. Balancing the statutory scheme, gravity of allegations, documentary evidence, recorded admissions, and the tangible risk of tampering with evidence and flight, the Court concluded that the petitioners have not made out a case for bail. The judgments relied upon by the petitioners were distinguished as being based on different factual matrices. The Court also referenced the principle that special acts are enacted for specific purposes and judicial review in such cases should be exercised cautiously, citing Radhika Agarwal vs. Union of India.

Facts

The petitioners, Manoj Kumar and Jagdish, are seeking bail in connection with offences under Section 132(1)(i) and 132(5) of the Central Goods and Services Tax Act, 2017 (CGST Act). Their bail applications were rejected by the Additional Sessions Judge. The Directorate General of GST Intelligence (DGGI) alleges that the petitioners facilitated onboarding of companies with online payment aggregators, enabling them to receive online gaming revenues totaling approximately Rs. 45 Crores without payment of GST. The alleged GST evasion was initially Rs. 11.20 Crores, later revised upwards. The petitioners were arrested on September 12, 2025, and have been in judicial custody since. The petitioners argue they are merely facilitators who received commissions and that the investigation is concluded. The revenue contends that the total transactions involved are approximately Rs. 90 Crores, with GST evasion estimated at Rs. 95.77 Crores.

Key Issues

1. Whether the petitioners are entitled to bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023, considering the alleged GST evasion of approximately Rs. 95 Crores under Section 132(1)(i) and 132(5) of the CGST Act? Petitioner's arguments: The petitioners contend that they are merely facilitators who received commission for their services and have no direct culpability. They argue that the investigation is concluded with the filing of the final complaint, and continued custody serves no purpose. They also claim the department's computation of GST liability is flawed and under challenge. They rely on Finance Ministry Instruction No. 2022-23 (GST Investigation Guidelines) stating arrest is not warranted in technical cases with divergent interpretations and cite various Supreme Court and High Court judgments, including Vineet Jain Vs. Union of India. Respondent's arguments: The State/Union of India argues that the petitioners deliberately concealed the true scale of evasion, with admitted receipts and additional collections amounting to very large sums. They contend that the petitioners facilitated transactions leading to significant GST evasion, and the possibility of absconding to defeat prosecution cannot be overlooked due to large sums involved and foreign communication. They rely on the gravity of economic offences and the principle that fraud vitiates everything.