Manoj Bansal vs. Director General Of GST Intelligence Rohtak

Held

The Court allowed the petition and made the interim bail order absolute. The Court noted that the petitioner had complied with the conditions imposed for interim bail, including furnishing a bank guarantee of Rs. 1 crore. The petitioner had been in custody from December 7, 2020, to March 16, 2021. The challan (complaint) had been filed, and proceedings under Section 74 of the CGST Act had been initiated. The Court found that the case was primarily based on documentary evidence and that no purpose would be served by sending the petitioner back into custody. The Court reiterated that the petitioner would remain bound by the conditions imposed in the interim bail order. It was clarified that the observations were for the purpose of adjudicating the bail application and not a final expression of opinion on the merits of the case.

Facts

The petitioner, Manoj Bansal, a Director of M/s Nikita Industries Pvt. Ltd., sought regular bail under Section 439 of the Cr.P.C. in a complaint case filed under Section 132(1)(b) and (c) of the CGST Act. The company was alleged to have availed Input Tax Credit (ITC) of Rs. 15.44 crores based on invoices from 31 non-existent supplier firms, without actual movement of goods. Transporters were also found to be non-existent, with transportation receipts recovered from the petitioner's company premises. The petitioner was arrested on December 7, 2020, after an investigation that began on March 27, 2018. A complaint had already been filed. The petitioner had been granted interim bail on March 16, 2021, subject to certain conditions, including furnishing a bank guarantee of Rs. 1 crore.

Key Issues

1. Whether the prosecution for alleged offences under Section 132(1)(b) and (c) of the CGST Act could be launched without prior determination of tax liability under Section 73 or 74 of the CGST Act, and whether such determination is a pre-condition for launching prosecution? (Petitioner's contention: Yes, determination of tax liability is a pre-condition. Revenue's contention: Not explicitly stated, but impliedly disagreed by proceeding with prosecution and later issuing notice under Section 74). 2. Whether the issuance of a notice under Section 69 of the CGST Act was contravened in the present case? (Petitioner's contention: Yes, contravened. Revenue's contention: Not explicitly stated, but impliedly disagreed by proceeding with the case). 3. Whether the custodial interrogation of the petitioner is required, given that the investigation is complete, a complaint has been filed, and the petitioner has no criminal antecedents? (Petitioner's contention: No, custodial interrogation is not required. Revenue's contention: Not explicitly stated, but impliedly disagreed by opposing bail initially).