Case Law Details
Aman Singh Vs Director General Goods And Service Tax Intelligence (Chhattisgarh High Court)
The Chhattisgarh High Court allowed the first bail application filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) by the applicant, who had been arrested on 14 March 2026 in connection with an offence under Section 132 of the CGST Act, 2017. According to the prosecution, M/s Hindustan Corporation, a proprietorship firm standing in the name of Jagat Sanyasi, fraudulently availed Input Tax Credit (ITC) without actual receipt of goods from bogus or non-existent suppliers and passed on such ITC to downstream entities without supplying goods, resulting in fraudulent invoices amounting to Rs. 7,59,25,127. The DGGI alleged that the applicant was instrumental in establishing and operating the firm after statements recorded during investigation linked him to its activities. The prosecution also relied on financial transactions between M/s Hindustan Corporation and the applicant’s proprietorship concern, M/s Khyati Enterprises, and alleged that the applicant avoided departmental summons and admitted to facilitating invoices, GST return filing, and substantial financial transactions between the entities.
The applicant contended that he had been falsely implicated, had no connection with the alleged offence, and was not the proprietor of M/s Hindustan Corporation, which stood in the name of Jagat Sanyasi. It was argued that no documentary evidence established him as the proprietor, that the main accused had not been arrested despite being the registered proprietor, and that he had remained in custody since 14 March 2026. The applicant further submitted that the ingredients of the alleged offence were absent and that continued incarceration would violate his right to a speedy trial.
After hearing both sides and examining the case diary, the High Court observed that although the prosecution alleged the applicant had played a key role in the creation and operation of M/s Hindustan Corporation and in the fraudulent availment and passing of ITC worth Rs. 7.59 crore, the proprietorship of the firm admittedly stood in the name of Jagat Sanyasi. The Court noted that no document of unimpeachable character had been produced at the bail stage to conclusively establish that the applicant was the proprietor of the firm. The prosecution’s case primarily rested on statements recorded during investigation, financial transactions between the firms, and circumstances allegedly indicating operational control. The Court held that whether such material was sufficient to establish conscious involvement, beneficial ownership, or criminal intent required detailed examination during trial and could not be conclusively determined while deciding the bail application.
The Court also noted that the applicant had been in custody since 14 March 2026, the investigation had substantially progressed, relevant documents and electronic evidence had already been seized, and no further custodial interrogation appeared necessary. Without expressing any opinion on the merits of the case, the High Court granted regular bail to the applicant. The Court directed that the applicant be released upon furnishing a personal bond of Rs. 1,00,000 with one solvent surety to the satisfaction of the concerned court. The bail order will remain in force until disposal of the case.
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
1. The applicant has preferred this First Bail Application under Section 483 of The Bharatiya Nagarik Suraksha Sanhita (BNSS) for grant of regular bail, as he has been arrested in connection with Crime No. AD220326002855D, dated 14.03.2026, by DGGI Zonal Unit Raipur, District – Raipur (C.G.) for the offence punishable under Sections 132 of CGST Act, 2017.
2. The case of the prosecution, in brief, is that the respondent/DGGI has alleged that M/s Hindustan Corporation is a proprietorship firm, in the name of Sanyasi Jagat who is said to be the Proprietor of the firm. The said firm fraudulently availed the benefit of Input Tax Credit (ITC) without actually receiving any goods from various bogus/non-existent supplier firms, and subsequently passed on the same ITC to several downstream entities without supplying any actual goods. Thus, the firm has misused the ITC by issuing fraudulent invoices for the sum of Rs. 7,59,25,127/-. Further it is alleged that secret information was received by the DGGI from an informer, after which investigation was carried out and it was found that the firm was not operational and no business activity was being conducted there, at the time of the inspection, the proprietor/Jagat Sanyasi was reported to be hospitalized due to an accident and he never appeared before the department despite a copy of the summons served on him, thereafter during the investigation, a search was conducted on 01/04/2025 at the premises of M/s Khyaati Enterprises, Raipur, belonging to the present applicant, where Sanyasi Jagat, was found present at the premises, during which statement of Jagat Sanyasi Jagat was recorded and he took the name of the applicant contending that the firm was established on the directions of the applicant and thereafter the applicant was arrested on 14/03/2026. Hence, this bail application.
3. Learned counsel for the applicant submits that the applicant is innocent and has been falsely implicated in the present case, having no connection whatsoever with the alleged offence. It is contended that the essential ingredients to constitute an offence under Section 132 of the CGST Act, 2017 are conspicuously absent and no prima facie case is made out against the applicant. It is also contended that the applicant has no nexus with the other firms alleged in the complaint and, considering the stringent procedure for GST registration, the acts of such entities cannot be attributed to him. It is further submitted that there si no documentation regarding the ownership or proprietorship of the firm which shows that the applicant is the proprietor of M/s Hindustan Corporation. It is submitted that the applicant is not the proprietor of M/s Hindustan Corporation, the said proprietor is Jagat Sanyasi, as per the allegation the applicant has forged ITC with the M/s Hindustan Corporation if that was the case, then the main accused Jagat Sanyasi musth have been arrested but without arresting the main accused person, the applicant has been arrested. It is lastly submitted that the applicant has been in custody since 14.03.2026. In such circumstances, continued incarceration of the applicant would serve no useful purpose and would amount to violation of his right to speedy trial under Article 21 of the Constitution of India. Hence, the applicant deserves to be released on bail.
4. On the other hand, the learned counsel for the non-applicant opposes the bail application and submits that a statement of Shri Santosh Bhardwaj on 30.06.2025 was recorded under Section 70 of the CGST Act, 2017, wherein he deposed that he filed some of the returns of firms related to the applicant i.e. M/s Khyati Enterprises (22FYFPS3441RIZU), M/s Hindustan Corporation, Raipur (GST: 22AIZPJ1649P1ZI) and M/s Samriddhi Trading, Raipur (GST: 22BVDPP8892G1Z7) and documents and data related to above three firms was also received through the applicant. Further, scrutiny of the bank account of M/s Hindustan Corporation, Raipur bearing account number 923020047448698 maintained with Axis Bank, Raipur revealed that substantial financial transactions have taken place between M/s Hindustan Corporation and M/s Khyati Enterprises, the proprietorship concern of the applicant. It was observed that M/s Khyati Enterprises, Raipur transferred an amount of approximately Rs. 4.93 Crore to the bank account of M/s Hindustan Corporation, whereas M/s Hindustan Corporation returned only Rs. 24.5 Lakh to M/s Khyati Enterprises through various transactions. These transactions appear to have been carried out without any underlying business activity between the two firms, thereby indicating financial dealings between related entities controlled by the applicant, which further corroborates his role in operating and managing the said firms. For verification of facts, multiple summons were issued to the applicant requiring him to appear and tender oral evidence. However, he deliberately avoided appearance before the department and failed to comply with the summons issued to him, thereby obstructing the investigation.
5. It is further submitted by learned counsel for the non-applicant that since the applicant was absconding and had not appeared before this office despite issuance of various summons, intelligence was gathered through reliable sources regarding his current whereabouts. It was considered that the applicant was arriving at Swami Vivekanand Airport, Raipur from Delhi. Accordingly, officers of DGGI, Raipur Zonal Unit reached Swami Vivekanand Airport, Raipur. Thereafter, the officers handed over a copy of the Summons to the applicant and in view of the non-availability of an appropriate place at the airport for recording his statement, the officers enquired whether he was willing to accompany them to the office of DGGI, Raipur Zonal Unit, Lalpur, Raipur for the purpose of recording his statement. The applicant voluntarily agreed to accompany the officers to the said office to tender oral evidence in response of summons issued to him. The applicant, in his initial statements attempted to portray himself as a mere broker with limited knowledge of the affairs of M/s Hindustan Corporation, attributing its ownership to his driver Akash (alias Sanyasi Jagat). However, despite such claims, he admitted to have actively facilitated transactions, handling invoices received through WhatsApp, assisting in filing of GST returns, and undertaking substantial financial transactions amounting to approximately Rs. 5.15 crore between the two entities, for which he failed to furnish any plausible explanation. Hence, considering the gravity, magnitude and organized nature of the offence, the bail application deserves to be rejected.
6. I have heard learned counsel for the parties and perused the case diary.
7. Considering the facts and circumstances of the case, the nature of allegations, the submissions advanced by learned counsel for the parties and the material available on record, it appears that although the allegation against the applicant is that he was instrumental in creation and operation of M/s Hindustan Corporation and that fraudulent availment and passing of Input Tax Credit (ITC) to the tune of Rs. 7,59,25,127/- was undertaken through the said entity, however, it is also noticeable that the proprietorship of M/s Hindustan Corporation admittedly stands in the name of Jagat Sanyasi and no document of unimpeachable character has been pointed out at this stage to conclusively establish that the applicant is the proprietor of the said firm. The prosecution seeks to connect the applicant with the alleged offence primarily on the basis of statements recorded during investigation, financial transactions between the accounts of M/s Hindustan Corporation and M/s Khyati Enterprises and circumstances allegedly indicating operational control of the business activities. Whether such material is sufficient to establish conscious involvement, beneficial ownership or criminal intent on the part of the applicant are questions which require detailed examination during trial and cannot be conclusively adjudicated at the stage of consideration of bail. It is also not in dispute that the applicant is in jail since 14.03.2026, the investigation has substantially progressed, relevant documents and electronic evidence have already been seized, and no further custodial interrogation of the applicant appears to be necessary. In such circumstances, without commenting anything on merits of the case, I am inclined to grant regular bail to the applicant. Accordingly, the bail application on behalf of the applicant – Aman Singh is allowed.
8. If the applicant, Aman Singh, furnishes a personal bond in the sum of Rs.1,00,000/- with one solvent surety to the satisfaction of the concerned Court, he be released on bail involved in Crime No. AD220326002855D, dated 14.03.2026, by DGGI Zonal Unit Raipur, District – Raipur (C.G.) for the offence punishable under Sections 132 of CGST Act, 2017. Order shall be in force till disposal of the case.
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