Raman Kumar Chaurasia Vs Directorate General of GST Intelligence (Punjab & Haryana High Court)
Conclusion: Since prolonged detention of assessees accused of ITC fraud was unjustified, given the documentary nature of evidence and completion of investigation. Applying the settled principle that bail is the rule and jail the exception, both assessees were granted regular bail with strict conditions to ensure fair trial and prevent misuse of liberty.
Held: Assessee-partners/proprietors of M/s Aar Dee Enterprises and M/s Aashi Steel Industries, were accused of fraudulently availing and utilizing ITC of ₹12.31 crore and ₹0.69 crore respectively through creation of 41 fake entities and invoices issued by bogus firms controlled by one Deepanshu Srivastav. These firms reportedly showed purchases from non-existent suppliers, primarily outside Punjab, and used local scrap traders to issue invoices without actual supply of goods. The total fraudulent ITC utilization was estimated at ₹8.63 crore, with an overall tax evasion of more than ₹12 crore. Assessees were arrested on 15.05.2025 and remained in custody; investigation was complete and complaint filed. The prosecution opposed bail citing the gravity of offence and likelihood of influencing witnesses. Assessees contended that they were falsely implicated, had conducted genuine business through banking channels, and that offences under Section 132(1)(i) carried a maximum imprisonment of 5 years; all evidence was documentary/electronic, and further detention served no purpose. It was held that referring to precedents including Dataram Singh v. State of U.P., Sanjay Chandra v. CBI, P. Chidambaram v. Directorate of Enforcement, and Vineet Jain v. Union of India, the Court reiterated that bail is the rule and jail the exception, even in economic offences, unless exceptional circumstances exist. Since assessees had been in custody since May 2025, investigation was complete, evidence was documentary, and trial likely to take long, further detention was unwarranted. Accordingly, bail was granted subject to stringent conditions including surrender of passports, non-tampering of evidence, cooperation in trial, and restraint from disposing assets or engaging in similar offences.
