Gurbax Lal @ Happy Nagpal Vs State of Punjab And Another (Punjab And Haryana High Court)
Conclusion: Anticipatory bail was denied to the accused involved in Rs. 425 crore GST fake billing case as there was necessity of custodial interrogation to unearth the full extent of the fraudulent network and modus operandi.
Held: Assessee was alleged to have orchestrated a complex web of fictitious firms and shell entities that issued fake invoices without any actual movement of goods. The case emerged from investigations by the Central Goods and Services Tax (CGST) Commissionerate, Ludhiana, which uncovered that assessee had control over multiple firms and bank accounts linked to massive input tax credit (ITC) frauds. Authorities claimed that ITC was wrongfully availed and passed on to the tune of ₹478 crore, with false billing alone amounting to ₹425 crore. Despite assessee’s claim that he had no ownership or formal connection with the implicated entities, the department produced evidence of blank cheques, multiple bank cards, and linkages to shell companies allegedly managed by him. His connection to several firms registered on the mobile number of a co-accused and the possession of documents and credentials of various fictitious entities further reinforced suspicions of deep-rooted involvement. It was held that anticipatory bail could not be used as a shield in cases where investigation into a financial conspiracy was ongoing, particularly when it involved complex trails of fake transactions, dummy firms, and substantial evasion of taxes that harm public revenue. Therefore, custodial interrogation of assessee was required to find out the modus operandi of assessee as well as involvement of other persons.
