Dr. Obed Ulla A Vs Senior Intelligence Officer (Principal Sessions Court, Chennai)
Bail Rejected Under Section 132 CGST Act on Prima Facie Material and Ongoing Investigation: Principal Sessions Court, Chennai
Summary
The petitioner sought bail after being arrested on 12 June 2026 in connection with an offence punishable under Section 132(1) of the CGST Act 2017. The petitioner, a Director of a company engaged in the purchase and resale of used gold jewellery under Rule 32(5) of the CGST Rules 2017 contended that he had joined the company only in 2024 and challenged the legality of his arrest.
According to the petitioner, the prosecution alleged that the company had misused the margin scheme by transporting old gold purchased through its branches, melting it into Gatti gold, reselling it without proper accounting, suppressing taxable turnover and evading GST exceeding Rs. 100 crore. Searches were conducted at the corporate office, branches and the petitioner’s residence. While various records and electronic devices were seized from the business premises, no incriminating material was recovered from the petitioner’s residence. The petitioner contended that the allegation of tax evasion exceeding Rs. 100 crore was unsupported by material and that the Commissioner had not recorded adequate reasons or material while approving arrest under Section 69(1) of the CGST Act, relying on judicial precedents concerning arrest, adjudication and recovery under the GST law. He also argued that arrest could not be used as a method for tax recovery, that no adjudication had determined the alleged tax liability, and that statutory safeguards and procedural requirements had not been followed.
