Anil Singh vs. Union Of INDIA

Held

The Court granted regular bail to the applicant, Anil Singh. While acknowledging the serious allegations of wrongful availment of Input Tax Credit (ITC) and the respondent's arguments regarding a planned fraud, the Court noted that the case primarily relies on documentary evidence. The Court observed that the investigation, to a substantial extent, appeared to have been carried out, with relevant documents seized and statements recorded. It was also not disputed that the applicant had been in custody since January 16, 2026, and no further custodial interrogation seemed necessary. Without commenting on the merits of the case, the Court found it inclined to grant bail. The applicant was directed to furnish a personal bond of Rs. 1,00,000/- with one solvent surety to the satisfaction of the concerned Court. The bail order is to remain in force until the disposal of the case. The Court did not expressly leave any issue undecided, but the decision to grant bail was based on the stage of investigation and custody period, rather than a definitive finding on the applicant's guilt or the legality of the arrest.

Facts

The applicant, Anil Singh, is seeking regular bail in connection with a case registered under Sections 132(1)(c) and (f) of the Goods and Services Tax (GST) Act. The prosecution alleges that the applicant, as the operator/director of M/s Sonam Sales and M/s Yuvraj Trading Company in Chhattisgarh, facilitated "bogus billing" by availing Input Tax Credit (ITC) through M/s Ramdoot Enterprises without actual physical movement of goods. The investigation originated from M/s Ramdoot Enterprises, which was found to be procuring goods from non-existent or suspended firms. The applicant has been in custody since January 16, 2026. The applicant contends that no incriminating material was recovered, the case relies on third-party records, and the investigation is substantially complete. The respondent argues that the applicant is a key person in a well-planned fraud involving fake ITC and bogus invoices, causing significant loss to government revenue.

Key Issues

1. Whether the applicant is entitled to regular bail, considering the allegations of wrongful availment of Input Tax Credit (ITC) and the stage of investigation, under Section 483 of The Bharatiya Nagarik Suraksha Sanhita (BNSS) and the principles of "bail is the rule, jail is the exception"? 2. Whether the arrest of the applicant was illegal for want of valid authorization under Section 69(1) of the GST Act? Petitioner's Arguments: The applicant argues that he is innocent and falsely implicated. He claims no incriminating material or bogus invoices were recovered, and the case relies on third-party records. He asserts the investigation is substantially complete, with his statement recorded and searches conducted. Continued incarceration violates Article 21. Allegations of non-movement of goods are matters for trial. He highlights the maximum punishment under Section 132(1) of the GST Act is five years, invoking the "bail is the rule" principle. He also argues no proper tax determination under Sections 73 and 74 was done and the arrest was illegal due to lack of valid authorization under Section 69(1). He is a permanent resident with no likelihood of absconding and is ready to furnish surety. He has been in custody since January 16, 2026, the investigation is complete, and no further custodial interrogation is needed. Respondent's Arguments: The respondent opposes bail, stating the applicant was involved in a planned fraud of availing fake ITC through bogus invoices without actual supply. Investigation shows the applicant knowingly availed huge ITC based on fake invoices received via WhatsApp, without supporting documents like e-way bills or transport receipts. Statements confirm no goods were supplied and transactions were on paper. The applicant is a key person and beneficiary causing huge loss to revenue, with large cash transactions and irregular records establishing the fraud. The arrest was made with proper authorization and based on material evidence. The investigation is ongoing and at a crucial stage, requiring custodial interrogation to uncover further facts and identify others. Granting bail could lead to tampering with evidence or influencing witnesses.