Ishan Gupta vs. Union Of INDIA

Facts

The applicant, Ishan Gupta, is seeking regular bail in connection with a case registered by the Directorate General of Goods and Services Tax Intelligence (DGGSTI) for alleged offences under Sections 132(1)(b) and 132(1)(c) of the CGGST Act, 2017. The DGGSTI alleges that Ishan Gupta was involved in creating fake firms and issuing fraudulent invoices to inflate turnovers and claim wrongful Input Tax Credits (ITC) without actual exchange of goods or services, causing substantial revenue loss. The applicant has been in jail since June 22, 2024. The charge-sheet has been filed. The applicant contends his bank accounts were seized before summons, that the GST Department failed to investigate actual beneficiaries, and that the same tax liabilities are being sought from multiple entities, which he argues is legally untenable.

Held

The Court granted regular bail to the applicant, Ishan Gupta. The Court considered the facts and circumstances of the case, the nature of the allegations, and crucially, the GST Department's failure to investigate or seize the accounts of the actual beneficiaries in the down-chain. The Court also noted that the applicant's bank accounts were seized even before any summons were issued. Furthermore, the Court found it legally untenable under Section 132(c) of the CGGST Act that the same tax liabilities were being sought from both the applicant and other entities, especially since no end users or beneficiaries had been implicated, which indicated a clear failure of the investigative process. The applicant had been in jail since June 22, 2024, and the charge-sheet/complaint had been filed, with the conclusion of the trial likely to take time. Therefore, without commenting on the merits of the case, the Court inclined to grant bail.

Key Issues

1. Whether the applicant, Ishan Gupta, is entitled to regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, considering the allegations of creating fake firms and issuing fraudulent invoices under Sections 132(1)(b) and 132(1)(c) of the CGGST Act, 2017? Petitioner's Arguments: The applicant argues he is innocent and falsely implicated. He highlights the GST Department's failure to investigate or seize accounts of actual beneficiaries, while his accounts were seized prematurely. He also contends that seeking the same tax liabilities from both him and other entities is legally untenable under Section 132(c) of the CGGST Act, as no end users or beneficiaries have been implicated, indicating a failure in the investigative process. The applicant has been incarcerated since June 22, 2024. Revenue's Arguments: The respondent (Union of India through the Senior Intelligence Officer, DGGI) opposes the bail application, reiterating the allegations that Ishan Gupta was involved in creating fake firms and issuing fraudulent invoices under Section 132 of the CGST Act to inflate turnovers and claim wrongful ITC, resulting in substantial revenue loss.