Sarthak Jain Vs Senior Intelligence Officer (Punjab and Haryana High Court)
The Punjab and Haryana High Court considered a petition seeking regular bail in a prosecution under Sections 132(1)(b) and 132(1)(c), punishable under Section 132(1)(i) of the Central Goods and Services Tax Act. The prosecution alleged that the petitioner was the proprietor of one firm, a partner and authorized signatory of another, and controlled the business and financial activities of a third entity. It was alleged that through these three firms, the petitioner fraudulently availed fake Input Tax Credit (ITC) of approximately ₹8.36 crore on the basis of fake GST invoices amounting to about ₹98.81 crore and passed on the wrongly availed ITC to beneficiary firms. According to the complaint, the ITC was claimed on invoices issued by 38 allegedly fake entities whose GST registrations had been cancelled on the ground that they were non-existent or non-operational. Searches conducted under Section 67(2) of the CGST Act led to the recovery of documents and electronic devices allegedly linked to fake GST billing activities. The petitioner was arrested on 22.02.2025 after investigation.
The petitioner argued that he had been falsely implicated and contended that his arrest was illegal because the grounds of arrest were not provided as required under Section 69 of the CGST Act. It was further argued that no enquiry under Section 70 of the CGST Act had been conducted before his prosecution. The petitioner submitted that the maximum punishment prescribed for the alleged offences was five years, that he had already undergone about five months of incarceration, had no criminal antecedents, and that the investigation stood completed as evidenced by the filing of the complaint. He also contended that the case was based entirely on documentary evidence and relied on various judicial precedents in support of his bail plea.
