Sandeep Kumar Goel Vs Union of India (Telangana High Court)
GST ITC Fraud: Telangana HC Grants Anticipatory Bail Where Evidence Already Secured; ₹94.96 Crore Alleged Fake ITC Case: Telangana HC Allows Anticipatory Bail; GST Arrest Cannot Be Mechanical When Custody Is Not Indispensable: Telangana HC;Telangana HC Grants Bail in GST ITC Case, Says Gravity Alone Cannot Curtail Liberty
Summary: Telangana High Court granted anticipatory bail to the petitioners, partners of M/s. Vijay Industrial Needs LLP, in an investigation concerning alleged fraudulent availment and utilisation of Input Tax Credit under the Central Goods and Services Tax Act, 2017. The Department alleged that the firm had fraudulently availed excess ITC of approximately Rs.94.96 crores, including nearly Rs.70.93 crores over and above the ITC reflected in GSTR-2A/2B, on invoices allegedly issued by fake or non-existent suppliers and without actual movement of goods. It was also alleged that multiple summons issued between June 2024 and June 2026 were not complied with and that custodial interrogation was necessary to trace the money trail, identify fictitious suppliers and beneficiaries, and investigate the alleged larger conspiracy.
The High Court held that economic offences involving large-scale evasion of public revenue constitute a serious class of offences requiring a fair and effective investigation. However, gravity of the allegation by itself cannot justify curtailment of personal liberty. The power of arrest under Section 69 of the CGST Act is neither mechanical nor automatic and can be exercised only where the statutory requirement of “reasons to believe” is satisfied on objective and tangible material. Arrest is an investigative measure and not a punitive one. The Court therefore examined whether custodial interrogation was genuinely indispensable or whether the investigation could proceed effectively without depriving the petitioners of their liberty.
