Directorate General of GST Intelligence Vs Sunny Jain (Delhi High Court)
Delhi High Court has dismissed a petition filed by the Directorate General of GST Intelligence (DGGI), upholding the bail granted to Sunny Jain, an accused in a significant Goods and Services Tax (GST) fraud case. The DGGI had challenged the Chief Metropolitan Magistrate’s decision to grant bail to Jain, who was accused of orchestrating fraudulent Input Tax Credit (ITC) claims amounting to ₹20 crores and illicit IGST refunds exceeding ₹10 crores through companies he allegedly controlled.
The DGGI expressed dissatisfaction that Jain was granted bail after spending only 13 days in custody. However, the High Court supported the Trial Court’s reasoning for granting bail. The Trial Court had noted that the investigating agency did not seek custodial interrogation at any point during Jain’s brief custody. It also considered Jain’s claim that he had resigned from the accused companies between August 16-20, 2016, with a Form DIR 12 uploaded on the ROC Portal on February 23, 2017 – a period well before the GST Act, 2017, came into force.
The High Court observed that investigations into GST evasion, false ITC claims, and IGST refunds primarily rely on departmental records and bank statements, which can be seized by the Investigating Officer without needing further custody of the accused. The court also took into account that Jain is a permanent resident of Delhi and there was no record of his previous involvement in similar offenses or being a habitual tax offender.
