Case Law Details
Parteek Das Gupta Vs State of Haryana and others (Punjab and Haryana High Court)
Regular Bail Allowed in GST Fraud Case Due to Cooperation During Investigation; HC Grants Bail in Input Tax Credit Evasion Case Because Further Custody Was Not Needed; Bail Granted in GST Case Despite Alleged Rs.19 Crore Liability Due to Documentary Evidence; Punjab & Haryana HC Allows Bail After Accused Agrees to Deposit Additional Amount.
The Punjab and Haryana High Court granted regular bail to a petitioner accused under Sections 69, 132 and 137 of the Haryana Goods and Service Tax Act, 2017, in a case involving alleged wrongful availment of input tax credit and tax evasion exceeding Rs.7 crores. The petition was filed in relation to proceedings initiated through case No. HGST-IU/PIR 1122016 dated 25.11.2022 before the Additional Chief Judicial Magistrate, Gurugram.
The petitioner argued that he had cooperated with the investigation since 2022 and had regularly appeared before the authorities while providing the information sought by the department. However, on 01.02.2024, his response was considered unsatisfactory and he was arrested. The petitioner further submitted that a show cause notice under Section 74(1) of the HGST Act was issued only after his arrest on 29.03.2024. It was also argued that the company, in which the petitioner was a Director, was undergoing Corporate Insolvency Resolution Process before the National Company Law Tribunal and any claims of the GST Department would have to be lodged before the Insolvency Resolution Professional. According to the petitioner, the entire case was based on documentary evidence and no further custodial interrogation was necessary.
The petitioner additionally relied upon proceedings pending before the Supreme Court challenging the powers of GST authorities to arrest persons under Sections 69, 132 and 137 of the Act. It was submitted that in a related matter the Supreme Court had directed that no coercive action be taken against another petitioner, and a similar interim protection had later been extended in the petitioner’s writ petition. Although the State clarified that the Supreme Court’s interim protection was granted after the petitioner’s arrest, the petitioner contended that the legality of the arrest powers themselves was under consideration before the apex court. The petitioner also voluntarily stated that Rs.50 lakh had already been deposited with the authorities and expressed willingness to deposit an additional Rs.25 lakh without prejudice to his defence.
The State opposed the bail plea, alleging that the petitioner was the main person responsible for the alleged fraud. It was argued that bogus firms had been created for availing input tax credit and evading taxes. The State submitted that a show cause notice had already been issued and, along with penalty, the total liability exceeded Rs.19 crores. The prosecution also expressed apprehension that the petitioner could influence witnesses, particularly 12 independent witnesses identified as drivers and delivery personnel. The State further contended that the petitioner had failed to satisfactorily answer specific queries raised during investigation concerning inspection and search proceedings conducted at the company premises and payments allegedly made as “DDP Payout” instead of through bank accounts of suspicious firms.
In response, the petitioner reiterated that the complaint had already been filed, the evidence was documentary in nature, and continued incarceration would serve no useful purpose. An undertaking was also given that the petitioner would neither contact nor influence any witness directly or indirectly. It was also pointed out that the offence was compoundable and triable by a Magistrate.
After hearing both sides, the High Court granted regular bail to the petitioner without expressing any opinion on the merits of the allegations. The Court noted that the petitioner was a 49-year-old entrepreneur whose business had suffered difficulties. Bail was granted subject to conditions including furnishing bail and surety bonds, declaration of residential address and mobile number, keeping the mobile phone operational, marking attendance before the concerned SHO every 15 days, not leaving the country without prior court permission, and submission of passport details. The Court also directed the petitioner to deposit Rs.5 lakh at the time of release and another Rs.20 lakh within one month. The authorities were given liberty to seek cancellation of bail if the petitioner violated any condition or attempted to influence witnesses.
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