Ayush Sureshchandra Shah vs. State Of Gujarat

Held

The Court allowed the applications for regular bail. The Court considered that the charge-sheet had been filed and that further investigation, while ongoing, was not a ground to refuse bail indefinitely. It acknowledged the respondents' apprehension regarding tampering with evidence but noted that bail conditions could mitigate such risks, referencing the Supreme Court's decision in Vineet Jain vs. Union of India, which emphasizes granting bail in economic offenses with limited sentences unless extraordinary circumstances exist. The Court highlighted that the maximum punishment under Section 132(1) of the CGST Act is only 5 years and the offense is triable by the JMFC. It also noted that nothing further needed to be recovered from the applicants. Citing established bail jurisprudence, including the principles in Sanjay Chandra vs. CBI and Gudikanti Narasimhulu vs. Public Prosecutor, the Court reiterated that "bail is the rule and jail is the exception" and that prolonged incarceration before trial amounts to pre-trial conviction, infringing upon personal liberty guaranteed under Article 21. The applicants were ordered to be released on bail upon furnishing a personal bond of ₹25,000/- with one surety of like amount, subject to several stringent conditions, including surrendering passports, not leaving Gujarat without permission, marking presence twice a month for three months, cooperating with further investigation, and not contacting witnesses or indulging in similar offenses. The Court also directed that the trial court should not be influenced by the preliminary observations made in the bail order.

Facts

The petitioners, Ayush Sureshchandra Shah and his father (proprietor of M/s. Mandovara Trading Co.), filed applications for regular bail. They were arrested on June 22, 2026, in connection with an offense registered under Sections 132(1)(b) and 132(1)(c) of the Gujarat Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Act, 2017. The prosecution alleges that the petitioners, in collusion, created 21 fictitious firms and fraudulently availed Input Tax Credit (ITC) worth ₹325 Crores without actual transportation of goods, causing a loss of ₹23.08 Crores to the public exchequer. A charge-sheet has been filed, and the petitioners have been in jail since their arrest. They contend they are innocent, falsely implicated, and that nothing further needs to be recovered or discovered. The State opposed the bail applications, citing the gravity of the economic offense, potential for tampering with volatile electronic data, and the likelihood of further investigation revealing more involvement.

Key Issues

1. Whether the applicants are entitled to regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, considering the charge-sheet has been filed and the maximum punishment is up to 5 years under Section 132 of the CGST Act? 2. Whether the apprehension of tampering with evidence by the respondents is a valid ground to deny bail, especially when the applicants are business professionals with no past antecedents and all materials have been seized? Petitioner's Arguments: - The applicants are innocent and falsely implicated. - Since the charge-sheet is filed, nothing further needs to be recovered or discovered. - The maximum punishment is only 5 years, and the offense is triable by the JMFC. - The applicants have been in jail since June 22, 2026. - There is no possibility of tampering with evidence as all books, materials, and electronic devices have been seized. - They are business professionals with no past antecedents. - They are willing to be granted bail with suitable conditions. Revenue/State's Arguments: - The applicants, in collusion, created 21 fictitious firms to fraudulently avail ITC worth ₹325 Crores, causing huge loss to the public exchequer. - Further investigation is ongoing, and statements of witnesses are being recorded, which may reveal further involvement. - There is a possibility of tampering with volatile electronic data. - Releasing the applicants on bail could lead to tampering with evidence and hinder the trial. - The nature and gravity of the offense warrant dismissal of the bail applications.