Rajnish Jain vs. Directoate General Of GST Intelligence Zonal Unit

Facts

The petitioner, Rajnish Jain, filed a bail application before the Allahabad High Court after his bail was rejected by the Sessions Judge, Meerut. The Directorate General of GST Intelligence (DGGI), Meerut, arrested the applicant for alleged offences under Sections 132(1)(b) & (c) read with Section 132(1)(i) of the Central Goods and Service Tax Act, 2017, and Section 69 of the CGST Act. The applicant has been in jail since May 19, 2023. The applicant argued that he was innocent, arrested without proper justification, and that the alleged offences are compoundable and triable by a Magistrate. He also pointed out that a co-accused with a similar role had been granted bail and that no GST recovery notice had been issued, nor had taxes or penalties been ascertained.

Held

The Court allowed the bail application, holding that it was a fit case for granting bail. The Court prima facie observed that the applicant was arrested without assigning any reason to believe or satisfaction as required by the Act. It noted that the alleged offences are punishable up to 5 years imprisonment, and no notice for GST recovery had been issued, rendering the arrest potentially illegal. The Court also considered that penalties or taxes had not been ascertained as per the Act and that the offences are compoundable and triable by a Magistrate. Citing various Supreme Court judgments on bail, including State of Rajasthan v. Balchand @ Baliay and Satender Kumar Antil v. CBI, the Court, without expressing an opinion on the merits of the case, found sufficient grounds to grant bail. The applicant was released on furnishing a personal bond and sureties, subject to several conditions aimed at preventing tampering with evidence, intimidating witnesses, ensuring presence during trial proceedings, and refraining from criminal activity. The trial court was directed to conclude the trial expeditiously.

Key Issues

1. Whether the arrest of the applicant was justified under the provisions of the CGST Act, considering the absence of a recorded reason to believe or satisfaction by the arresting authority? 2. Whether the alleged offences under Sections 132(1)(b) & (c) read with Section 132(1)(i) of the CGST Act, 2017, and Section 69 of the CGST Act are compoundable and triable by a Magistrate, impacting the bail considerations? 3. Whether the applicant is entitled to bail on parity with a co-accused who has been enlarged on bail by a coordinate bench of this Court? Petitioner's Arguments: The applicant contended that his arrest was illegal as no reason to believe or satisfaction was recorded by the DGGI. He argued that the offences are punishable up to 5 years, are compoundable, and triable by a Magistrate. He also highlighted that no GST recovery notice was issued, and taxes/penalties were not ascertained. Furthermore, he submitted that a co-accused with a similar role was granted bail, and he has no significant criminal history. Revenue's Arguments: The DGGI opposed the bail application, supporting the Sessions Court's order. They argued that the allegations were serious and that the applicant might indulge in similar activities if released on bail. However, they could not point out contrary material to the applicant's submissions.