Sanjeet Kumar Pandey @ Sanjeet Pandey vs. The Union Of INDIA Through Directorate General Of GST Intelligence Dggi

Facts

The petitioner, Sanjeet Kumar Pandey, is an accountant accused of orchestrating a multi-layered network for issuing and availing inadmissible Input Tax Credit (ITC) without actual supply of goods or services. The Directorate General of GST Intelligence (DGGI) conducted a search at M/s Maa Vaishnavi Singh & Sons, where the petitioner allegedly acted as the mastermind. The firm, registered in August 2017 and cancelled in July 2024, had no genuine business infrastructure but declared a high turnover. The proprietor's statement implicated the petitioner as the chief architect of fake invoices, login credentials, and fund routing. The firm is alleged to have fraudulently availed ITC of approximately Rs. 36.21 crores and passed on ITC of Rs. 8.08 crores, totaling Rs. 44.30 crores. The petitioner claims to be merely an accountant and that the proprietor, who has been granted bail, is the main accused. The petitioner has been in judicial custody since May 26, 2026.

Held

The Court, having heard the learned counsel for the parties and considering the facts and circumstances of the case, is inclined to enlarge the petitioner on bail. The Court's decision appears to be influenced by the petitioner's submission that the charge sheet has been filed, his prolonged period in judicial custody since May 26, 2026, and the fact that the proprietor, who is allegedly the main accused, has already been granted bail. While the revenue argued that the offense is an economic one requiring stern action and highlighted the penal provisions under Section 132 of the CGST Act, the Court seems to have weighed these arguments against the petitioner's plea for bail, particularly in light of the completion of investigation and the bail granted to the proprietor. The specific reasoning for granting bail, beyond the general inclination based on the circumstances, is not elaborated in detail in the provided excerpt, but it implies a balancing of the gravity of the offense against the rights and circumstances of the accused. The Court directed the petitioner to be enlarged on bail upon furnishing a bail bond of Rs. 10,000/- with two sureties of like amount.

Key Issues

1. Whether the arrest and continued detention of the petitioner are justified in light of the principles laid down in Arnesh Kumar v. State of Bihar and Satender Kumar Antil v. CBI regarding necessity of arrest and adherence to procedural safeguards? 2. Whether the petitioner, as an accountant, can be held solely responsible for the alleged economic offense involving fraudulent ITC, especially when the proprietor has been granted bail? Petitioner's Arguments: The petitioner contends that he is merely an accountant and the primary allegations are against the proprietor, who has already been granted bail. He argues that Section 69 of the CGST Act requires 'reason to believe' for arrest and relies on Apex Court judgments like Arnesh Kumar and Satender Kumar Antil, emphasizing the need for police officers not to arrest unnecessarily and for Magistrates not to authorize detention casually. He also submits that since the charge sheet has been filed and he has been in custody since May 26, 2026, further detention serves no purpose and there is no risk of tampering with evidence. Revenue's Arguments: The GST Intelligence vehemently opposes bail, characterizing the offense as an economic crime that shatters the economy and requires stern handling. They highlight that Section 132 of the CGST Act prescribes significant imprisonment for such offenses, with penalties extending up to five years for amounts exceeding Rs. 5 crores.