Harish Wadhwani vs. State Of Chhattisgarh

Held

The Court allowed the anticipatory bail application. The Court noted that the allegations against the applicant primarily rested upon documentary and digital evidence already in the custody of the investigating agency, seized under Section 67 of the CGST Act. It was also observed that the maximum punishment prescribed for the alleged offence under Section 132 of the CGST Act is only five years, and therefore, the offence does not fall within the category of heinous or violent crimes that ordinarily warrant pre-trial incarceration. The limited statutory severity of punishment, coupled with the nature of the allegations, militated against the necessity of custodial detention at this stage. The Court found that the continued liberty of the applicant, subject to reasonable conditions, did not appear to pose any risk of absconding or tampering with evidence, especially since the relevant data had already been seized. Furthermore, the Court noted that a co-accused had already been granted regular bail in a related matter. Considering the totality of the circumstances, the nature of the accusation, the character of the evidence, the stage of investigation, the maximum punishment prescribed, and the fact that custodial interrogation had not been shown to be indispensable, the Court was inclined to grant anticipatory bail. The applicant was directed to be released on bail upon executing a personal bond and surety, subject to several conditions, including not inducing or threatening witnesses, not acting prejudicially to the investigation, appearing as and when required, submitting identity proofs, and not involving himself in future offences of a similar nature.

Facts

The applicant, Harish Wadhwani, filed an anticipatory bail application under Section 482 of the BNSS before the Chhattisgarh High Court. The application arose from proceedings initiated by the Commissioner State Goods and Services Tax. The department conducted search proceedings at the applicant's office premises on 20.05.2025 and 21.05.2025, based on information regarding fraudulent availment of Input Tax Credit (ITC). During the search, documents and business records were seized, suspecting tax evasion and wrongful ITC availment amounting to approximately ₹17.83 crore. The department issued multiple summons to the applicant between June 2025 and January 2026. The applicant alleged that despite no incriminating material being found during the search, he faced threats of arrest and successive summons. He further stated that his ITC amounting to ₹28,87,88,505/- was blocked on 15.10.2025, and a communication dated 16.10.2025 alleged ITC availment on invoices without goods movement, escalating the proceedings to coercive measures.

Key Issues

1. Whether the applicant is entitled to anticipatory bail under Section 482 of the BNSS in connection with proceedings initiated under the CGST/SGST Acts, particularly when an FIR has not been registered? 2. Whether the alleged offences under Section 132 of the CGST Act, pertaining to fiscal and regulatory matters and being compoundable, warrant pre-trial incarceration, considering the maximum punishment prescribed is five years? 3. Whether the blocking of Input Tax Credit and subsequent communication alleging wrongful availment of ITC constitute a real and imminent threat to the applicant's liberty, justifying anticipatory bail? Petitioner's Arguments: - The application is maintainable under Section 482 of BNSS, as there is a bona fide apprehension of arrest, and the absence of an FIR does not bar anticipatory bail (relying on Sushila Aggarwal vs. State and Radhika Agarwal vs. Union of India). - Anticipatory bail is an essential safeguard against arbitrary exercise of arrest powers, balancing investigation interests with fundamental rights. - Despite no incriminating material found during the search, the applicant faced threats of arrest and successive summons. The blocking of ITC and subsequent communication escalated proceedings to coercive measures, posing a real threat to liberty. - Offences under Section 132 of CGST Act are fiscal, regulatory, compoundable, and punishable with a maximum of five years, thus not heinous enough to warrant pre-trial incarceration. - The investigation is documentary, records are with the department, and custodial interrogation is not necessary. - Reliance was placed on Mohd. Farhan vs. State of Chhattisgarh, Tarun Jain vs. DGGI, and Arvind Dham vs. Directorate of Enforcement, holding that economic offences do not automatically justify denial of bail. - The applicant has cooperated, has no criminal antecedents, and the alleged ITC amount is substantially lower than in comparable cases where bail was granted. - The CGST Act's provision for compounding offences emphasizes revenue protection over punitive incarceration. Revenue/State's Arguments: - Learned State counsel opposed the anticipatory bail application.