Ankit Singh vs. State Of Chhattisgarh

Held

The Court held that the applicant is entitled to regular bail. The reasoning was based on several factors: the complaint had already been filed; no statutory notice or assessment had been conducted against the applicant under the SGST Act, 2017, meaning the quantum of tax involved remained unassessed and appealable; the applicant had fully cooperated with the investigation; and no purpose would be served by his further detention. The Court emphasized that the primary object of the Act is economic recovery rather than punitive incarceration. It also considered the settled principles of law laid down by the Supreme Court in *Vineet Jain* and various High Court rulings, the character, standing, and conduct of the applicant, and the fact that he had been in jail since August 20, 2025. Therefore, without commenting on the merits of the case, the Court was inclined to grant bail. The operative direction was to release the applicant on bail upon furnishing a personal bond of Rs. 1,00,000/- with one solvent surety, with the order to remain in force till the disposal of the case.

Facts

The applicant, Ankit Singh, Director of M/s Mahavir Moulds India Private Limited, is seeking regular bail. He was arrested in connection with Crime No. Arr. 02/2025 for alleged involvement in offences under Section 132(1)(b) and (c) of the SGST Act, 2017. The prosecution alleges that the applicant, through seven companies including M/s Mahavir Moulds India Private Limited, claimed ineligible or fake Input Tax Credit (ITC) amounting to approximately Rs. 23.06 crores from non-existent or suspected entities. The complaint was filed by the Deputy Commissioner of State Tax (BIU), Nawa Raipur Division. The applicant has been in custody since August 20, 2025.

Key Issues

1. Whether the conditions precedent for establishing offences under Section 132(1)(b) and (c) of the SGST Act, 2017, have been prima facie made out against the applicant? 2. Whether the applicant is entitled to bail, considering the quantum of tax involved remains unassessed, the offences are compoundable, and the primary object of the Act is economic recovery rather than punitive incarceration? Petitioner's Arguments: - No conditions precedent for offences under Section 132(1)(b) and (c) are met. - The quantum of tax is unassessed and appealable, making detention unwarranted. - Cites Supreme Court in *Vineet Jain v. Union of India* and Bombay High Court in *Rahul s/o Kamalkumar Jain v. Director General, GST Intelligence* for the principle that offences under Section 132(1) attract maximum punishment of five years, warranting early bail. - Argues all offences are compoundable under Section 138, and the Act's object is revenue recovery, not incarceration. - Relies on Calcutta High Court in *Sanjay Kumar Bhuwalka v. Union of India* and Andhra Pradesh High Court in *M/s Sree Constructions v. Assistant Commissioner (ST)* for mandatory preconditions of statutory notice and assessment before invoking penal provisions, which are absent. - Refers to Supreme Court in *P. Chidambaram v. CBI* for bail factors. - States applicant cooperated, complaint filed, and trial will take time. Respondent's Arguments: - Applicant, as director, orchestrated a network of non-existent businesses to wrongfully claim ITC of approximately Rs. 23.28 crore, causing substantial loss. - Engaged in creation of fake invoices to evade taxes. - Due to enormity of tax evasion and sophisticated method, applicant is not entitled to bail.