Anurag Aggarwal vs. State Tax Officer, Office Of Assistant Commissioner State Tax

Held

The Court allowed the petition for regular bail. The primary reasoning was that the investigation in the case was complete, and the challan had been presented. This distinguished the present case from the one relied upon by the State (Rakesh Arora Vs. State of Punjab), where bail was denied due to incomplete investigation. The Court noted that the petitioner's custody was no longer required. While the petitioner raised arguments regarding the vires of Section 69 and 132 of the CGST Act and the jurisdiction of arrest, the Court did not explicitly rule on these issues in its bail order. The ratio decidendi for granting bail is the completion of investigation and presentation of the challan, rendering the petitioner's continued detention unnecessary. The Court directed the petitioner's release on furnishing adequate personal/surety bonds of Rs. 10 lakhs, surrendering his passport, and not leaving India without prior court permission. Any observations made were not to be construed as an expression on the merits of the case.

Facts

The petitioner, Anurag Aggarwal, was arrested on November 10, 2020, by the State Tax Officer, Ludhiana, under Section 132(1)(c) of the Central GST Act, 2017, and Punjab GST Act, 2017, for alleged wrong availment of Input Tax Credit (ITC). A total liability of Rs. 11.56 crores was fastened upon him, though he claims to have reversed an entry of Rs. 6.6 crores, leaving a disputed liability of approximately Rs. 4.9 crores. At the time of filing the petition, no FIR or complaint had been filed. The petitioner also challenged the vires of Section 69 and 132 of the CGST Act, 2017, in a separate writ petition (CWP No. 8004 of 2020), arguing that arrest under Section 69 of the Punjab GST Act, 2017, was without jurisdiction. The challan (complaint) has since been presented.

Key Issues

1. Whether the arrest of the petitioner under Section 69 of the Punjab Goods and Service Tax Act, 2017, was without jurisdiction, considering the challenge to the vires of Section 69 and 132 of the Central GST Act, 2017, in a connected matter? 2. Whether the petitioner is entitled to regular bail, given that the challan has been presented and the investigation is complete? Petitioner's Arguments: The petitioner argued that the arrest under Section 69 of the Punjab GST Act, 2017, was without jurisdiction. He contended that the disputed liability was at best Rs. 4.9 crores, as he had already reversed an entry of Rs. 6.6 crores. He relied on orders from Coordinate Benches granting bail to similarly placed persons (Ganga Ram Vs. State of Punjab, Deepak Mittal Vs. Director General of Goods and Services Tax Intelligence) and an interim order from the Bombay High Court (Daulat Samirmal Mehta Vs. Union of India). He also pointed out that no FIR or complaint was filed at the time of arrest and that the challan has since been presented. Respondent's Arguments: The respondent-State, represented by the State Tax Officer, opposed the grant of bail, relying on an order from a Coordinate Bench in Rakesh Arora Vs. State of Punjab, where bail was denied because the investigation was incomplete. The State Tax Officer stated that a complaint had been filed against the petitioner, with an assessment of approximately Rs. 11 crores and odd, and the petitioner had filed ITC amounting to Rs. 19 crores and odd.