Case Law Details
Sovit Bansal Vs Directorate General of GST (Punjab and Haryana High Court)
Punjab & Haryana HC Grants Bail Because Complaint Was Filed and Further Custody Was Unnecessary; GST Fraud Accused Released on Bail Because Witness Examination Had Not Started; Bail Allowed in GST Evasion Case Despite ₹116 Crore Allegation Because Trial Delay Favoured Release; Punjab & Haryana HC Grants Bail in Fake ITC Case Because Maximum Punishment Was Five Years; Further Incarceration Not Required After Filing of GST Complaint; Punjab & Haryana HC Releases GST Evasion Accused on Bail Subject to Monthly Reporting Conditions; Bail Granted in Alleged Fake Invoice and ITC Fraud Case Because Trial Was Expected to Take Time: Punjab and Haryana High Court
The petitions before the Punjab and Haryana High Court sought regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in a complaint filed under Sections 132(1)(a) and 132(1)(c) read with Section 132(1) of the CGST Act, 2017 along with provisions of the IGST Act and Punjab GST Act.
The petitioners were alleged to be involved in clandestine sale of goods through six firms, namely M/s Shree Salasar Steel Tubes & Co., M/s Shree Salasar Balaji Steel Tubes, M/s K.T.B. Alloys, M/s A.K.M. Alloys, M/s Ram Ji Concast, and M/s Bharat Steel Industries. According to the complaint, secret information was received that the petitioners were engaged in GST evasion activities through these firms.
Based on the information, the Directorate General of GST conducted searches under Section 67(2) of the CGST Act on 22.02.2025 at business premises, residences of partners, and employees connected with the firms. The investigating agency concluded that the petitioners were key persons involved in clandestine sales of goods.
The authorities alleged that goods were sold without issuance of invoices involving GST liability of ₹69.99 crores. It was further alleged that fraudulent Input Tax Credit amounting to ₹46.53 crores was availed and utilized without actual receipt of goods from non-existent firms. According to the agency, the total GST evasion amounted to ₹116.53 crores. After completion of investigation, a complaint was filed before the Chief Judicial Magistrate, Ludhiana on 27.06.2025.
The petitioners contended that the allegations were baseless and that they had been illegally taken into custody, with arrest shown subsequently. It was argued that no grounds of arrest had been served and that mandatory provisions of Sections 73 and 74 of the CGST Act were not followed before arrest. The petitioners further submitted that they had remained in custody since 02.05.2025, the complaint had already been filed, and none of the 25 prosecution witnesses had been examined, making early conclusion of trial unlikely. They also emphasized that the maximum punishment prescribed for the offences was five years.
The respondent opposed the bail petitions on the ground that a huge GST fraud involving evasion of ₹116.53 crores had been committed. It was argued that the gravity of the allegations itself disentitled the petitioners from grant of bail. However, the respondent conceded that the complaint had already been filed, the petitioners were in custody since 02.05.2025, and none of the prosecution witnesses had yet been examined.
The High Court observed that the veracity of the allegations would be determined during trial. It noted that despite the petitioners being in custody since 02.05.2025, examination of prosecution witnesses had not commenced and the trial was unlikely to conclude in the near future. In these circumstances, the Court held that further incarceration of the petitioners was not required.
Without expressing any opinion on the merits of the case, the High Court allowed the petitions and granted regular bail to all three petitioners subject to furnishing bail bonds and surety bonds to the satisfaction of the concerned Court.
The Court also imposed conditions while granting bail. The petitioners were directed to appear before the local police station on the first Monday of every month until conclusion of trial and submit written confirmation that they were not involved in any other criminal case. Additionally, each petitioner was directed to prepare and deposit an FDR of ₹2,00,000 before the Trial Court, which would be liable to forfeiture in case of absence from trial without sufficient cause.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
This order shall dispose of three criminal miscellaneous petitions i.e. CRM-M-38861-2025, CRM-M-42749-2025 and CRM-M-44075-2025 as they arise out of the same FIR.
2. The petitioner-Sovit Bansal (in CRM-M-38861-2025), petitioner-Karan Bansal (in CRM-M-42749-2025) and petitioner-Shri Sanjeev Kumar Bansal (in CRM-M-44075-2025) seek the grant of regular bail under Section 483 of BNSS, 2023 in case bearing complaint No.15530 dated 27.06.2025 under Sections 132(1)(a) and 132(1)(c) r/w Section 132(1) of CGST Act, 2017 r/w Section 20 of IGST Act, 2017 and Punjab GST Act, 2017 pending before the JMIC, Ludhiana, as they arise out of a same complaint.
3. For the sake of convenience, the facts are being taken from the petition bearing No. CRM-M-38861-2025.
4. The brief facts of the case are that secret information was received that Sanjeev Kumar (petitioner in CRM-M-44075-2025) alongwith his two sons-Karan Bansal (petitioner in CRM-M-42749-2025) and Sovit Bansal (petitioner in CRM-M-38861-2025) were involved in Clandestine sale of goods through their six firms, namely, M/s Shree Salasar Steel Tubes & Co., M/s Shree Salasar Balaji Steel Tubes, M/s K.T.B. Alloys, M/s A.K.M. Alloys, M/s Ram Ji Concast and M/s Bharat Steel Industries. Based on the said secret information, the respondent-agency conducted a search under Section 67(2) of CGST Act, 2017 at the business premises of the aforementioned firms alongwith the residential premises of their partners and employees on 22.02.2025. On the basis of various searches conducted on the said date, the agency concluded that the petitioners were the key persons for the Clandestine Sale of goods. It was allegedly found that there were various sale of goods without actual issuance of invoices involving GST amount of Rs.69.99 Crores and further there were fraudulent availment and utilization of ITC of Rs.46.53 Crores without physical receipt of goods from non-existence firm. Therefore, the agency alleged that there was total GST evasion of Rs.116.53 Crores. Pursuant thereto, on conclusion of the investigation, a complaint has been filed before the Court of the Chief Judicial Magistrate, Ludhiana on 27.06.2025 for commission of the offences under Sections 132(1)(a) and (c) of CGST Act, 2017.
5. The learned Senior counsel for the petitioners contends that the allegations levelled in the complaint are baseless. In fact, the petitioners were taken into custody illegally but their arrest has been shown later. No grounds of arrest were served upon them. The petitioners have been arrested without following the mandatory provisions of Sections 73 and 74 of the CGST Act, 2017. The complaint already stands filed. As the petitioners are in custody since 02.05.2025 but none of the 25 prosecution witness has been examined so far, the Trial of the present case is not likely to be concluded anytime soon and therefore, they are entitled to the concession of bail, particularly, when the maximum sentence on conviction would be for a period of 05 years.
6. The learned counsel for the respondent vehemently contends that a huge fraud has been perpetrated by the petitioners. There has been a total GST evasion of Rs.116.53 Crores. Therefore, the gravity of the offence committed itself does not entitle the petitioners to the grant of bail. He, however, concedes that the complaint stands filed, that the petitioners are in custody since 02.05.2025 and that none of the 25 prosecution witnesses has been examined so far.
7. I have heard the learned counsel for the parties.
8. The veracity of the prosecution case against the petitioners shall be adjudicated upon during the course of the Trial. They are stated to be in custody since 02.05.2025 but none of the 25 prosecution witnesses has been examined so far. Therefore, the Trial of the present case is not likely to be concluded anytime soon. In this situation, the further incarceration of the petitioners is not required.
9. Thus, without commenting on the merits of the case, the present petitions are allowed and the petitioners, namely, Sovit Bansal (in CRM-M-38861-2025), Karan Bansal (in CRM-M-42749-2025) and Shri Sanjeev Kumar Bansal (in CRM-M-44075-2025) are ordered to be released on bail subject to their furnishing bail bonds and surety bonds each to the satisfaction of learned CJM/Duty Magistrate, concerned.
10. The petitioners shall appear before the police station in the local area in which they are ordinarily resident on the first Monday of every month till the conclusion of the trial and inform in writing each time that they are not involved in any other crime/case other than the present one.
11. The petitioners (or anyone on their behalf) shall prepare an FDR in the sum of Rs.2,00,000/- each and deposit the same with the Trial Court. The same would be liable to be forfeited as per law in case of the absence of the petitioners from trial without sufficient cause.
12. The petitions stand disposed of.
13. The pending application(s), if any, shall stand disposed of accordingly.
14. A photocopy of this order be placed on the files of the case connected cases bearing No.CRM-M-42749-2025 tiled as ‘Karan Bansal versus Directorate General of GST, Ludhiana’ and CRM-M-44075-2025 tiled as ‘Shri Sanjeev Kumar Bansal versus Directorate General of GST, Ludhiana’.
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