{"id":356806,"date":"2025-08-17T16:00:35","date_gmt":"2025-08-17T10:30:35","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=356806"},"modified":"2025-08-21T10:26:43","modified_gmt":"2025-08-21T04:56:43","slug":"pending-investigation-no-ground-to-deny-bail-ph-hc","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/08\/17\/pending-investigation-no-ground-to-deny-bail-ph-hc\/","title":{"rendered":"Pending investigation against co-accused cannot be sole ground to deny bail to accused under Section 132 CGST Act: Punjab & Haryana HC"},"content":{"rendered":"
\n

Punjab and Haryana High Court:<\/span> In the present case, two petitions were filed under Section 483<\/a> of the Bharatiya Nagarik Suraksha Sanhita, 2023<\/a> (\u2018BNSS\u2019) seeking regular bail in the case filed under Sections 132(1)(b)<\/a> and 132(1)(c)<\/a> of the Central Goods and Service Tax Act, 2017<\/a> (\u2018CGST Act\u2019). A Single Judge Bench of Harpreet Singh Brar, J.<\/span>, held that an accused in a complaint under Section 132<\/a> of the CGST Act<\/a> could not be denied the concession of bail solely on the ground that the investigation remained pending against a co-accused. Thus, the Court released the petitioners on regular bail.<\/p>\n

Background<\/h3>\n

In the present case, an information was received from the Financial Investigation Unit in form of a Suspicious Transaction Report indicating substantial cash withdrawals of Rs 4,938.63 crore, from two branches of the IFSC Bank, i.e., Ambala Cantt and Panchkula. Petitioner 2 withdrew Rs 262.4 crore in cash from 8 bank accounts while Petitioner 1 withdrew Rs 455.02 crore from 11 bank accounts.<\/p>\n

The petitioners had created 27 fake firms, 2 of which were under Petitioner 2 while the remaining 25 were established by fraudulently obtaining IDs of other persons, though connected to his mobile number and email. When a search was conducted under Section 67(2)<\/a> of the CGST Act<\/a>, a number of documents pertaining to fake GST billing as well as various electronic devies were recovered. On investigation, it was concluded that the petitioners issued forged and fabricated GST invoices worth approximately Rs 700 crore and availed input tax credit amounting to approximately Rs 107 crore based on the same.<\/p>\n

The petitioners contended that the respondent officials failed to abide by the grounds of arrest as the authorization for arrest under Section 69<\/a> of the CGST Act<\/a> had been granted in a mechanical manner, without duly appreciating the material available against them. On the other hand, the respondents contended that the investigation against another co-accused remained pending and therefore, extending the benefit of bail to the petitioners would allow them to influence witnesses and tamper with the evidence.<\/p>\n

Analysis and Decision<\/h3>\n

The Court considered the departmental tax liability assessment under Sections 73<\/a> and 74<\/a> of the CGST Act<\/a> as well as criminal prosecution for tax evasion under Section 132<\/a> of the CGST Act<\/a> along with the affidavits submitted by the officers concerned and observed that since the implementation of GST Policy in 2017, in the States of Punjab, Haryana and Union Territory of Chandigarh, notices under Sections 73<\/a> and 74<\/a> of the CGST Act<\/a> were served in very few cases. Further, the Court opined that it was understandable that economic offences required sophisticated investigation but the same could not go on indefinitely.<\/p>\n

The Court stated that the involvement of the criminal justice system in cases pertaining to the CGST Act commenced at the stage of arrest and ended when bail was secured. Allowing such tendencies to go unchecked would raise serious doubts about the efficacy of investigation, which naturally weakens the faith of the public in the justice dispensation mechanism. Further, the Court stated that slow-paced trials stemming from complaints under Section 132<\/a> of the CGST Act<\/a> and the departure from the established procedure in Sections 73<\/a> and 74<\/a> of the CGST Act<\/a>, throughout the States of Punjab, Haryana as well as Union Territory of Chandigarh was symptomatic of a systemic problem which showed a concerning deviation from the procedure established by law.<\/p>\n

Further after considering that the petitioners had been in custody for 9 months 18 days while no substantial progress was made in the trial, the Court held that an accused in a complaint under Section 132<\/a> of the CGST Act<\/a> could not be denied the concession of bail, solely on the ground that investigation remained pending against a co-accused.<\/p>\n

The Court further observed that the respondent could not controvert the fact that the petitioners had clean antecedents and had fully cooperated in the investigation. Moreover, most of the evidence was in documentary and electronic form, which was already in possession of the investigating agency.<\/p>\n

Accordingly, both the petitions were allowed and petitioners were released on regular bail subject to their furnishing bail bonds\/surety bonds to the satisfaction of the Court concerned.<\/p>\n

[Manish Kumar v. GST Intelligence Directorate, 2025 SCC OnLine P&H 5530<\/a>, decided on 28-7-2025<\/span>]<\/p>\n

\n

Advocates who appeared in this case :<\/p>\n

For the Petitioner:<\/span> Vinod Ghai, Senior Advocate, Kashish Sahnia, Advocate, Arnav Ghai, Advocate, Muskaan Gupta, Advocate and Muskan Chauhan, Advocate<\/p>\n

For the Respondent:<\/span> Sharmila Sharma, Senior Panel Counsel, Sunish Bindlish, Senior Standing Counsel, Pridhi Sandhu, Senior Standing Counsel CGST, Manish Bansal, Public Prosecutor, U.T. Chandigarh and Alankrit Bharadwaj, Addl. P.P., U.T. Excise and Tax Department<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The involvement of criminal justice system in cases pertaining to CGST Act begins at the stage of arrest and ends when bail is secured. Allowing such tendencies to go unchecked will raise serious doubts about efficacy of investigation, which naturally weakens the faith of the public in justice dispensation mechanism.<\/p>\n","protected":false},"author":67011,"featured_media":356863,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[87332,68319,44494,76390,87330,2670,87329,87331],"class_list":["post-356806","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-bail-when-investigation-is-pending","tag-bnss-2023","tag-cgst-act-2017","tag-justice-harpreet-singh-brar","tag-pending-investigation-no-ground-to-deny-bail","tag-Punjab_and_Haryana_High_Court","tag-section-132-cgst-act","tag-section-132-cgst-act-bail"],"yoast_head":"\nP&H HC:Pending investigation no ground to deny bail|SCC 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