Pramod Chandra Navik S/o Shri Phool Chand Vs Union of India (Rajasthan High Court)
Summary: The Rajasthan High Court, Bench at Jaipur, considered S.B. Criminal Miscellaneous Bail Application No. 13050/2026 filed by Pramod Chandra Navik against the Union of India. The order was passed by Hon’ble Mr. Justice Bipin Gupta on 24 August 2026.
The petitioner’s counsel submitted that the petitioner had been falsely implicated in the alleged GST/ITC fraud. It was submitted that he had resigned as Director of the concerned company on 12.07.2024, whereas the alleged bogus firms and transactions came into existence only from October 2025 onwards. According to the petitioner, there was therefore no factual or chronological nexus between him and the alleged offences.
The petitioner also challenged the finding of non-cooperation recorded while rejecting anticipatory bail on 28.07.2026. It was submitted that he had appeared through authorised counsel on 19.06.2026, sought two weeks’ time and communicated the same by email along with his vakalatnama, after which no further summons was issued to him.
It was further submitted that the petitioner had neither been arrayed as an accused nor made a noticee in any show-cause notice and had only been summoned under Section 70 of the CGST Act. The petitioner’s counsel contended that the investigation was based entirely on documentary and digital evidence, including invoices, e-way bills, banking records and GST portal data, which were already in the possession of the investigating agency. On that basis, it was submitted that custodial interrogation was neither necessary nor warranted.
The petitioner relied upon Harshendra Kumar D. v. Rebatilata Koley, (2011) 3 SCC 351, submitting that a director who had resigned before the alleged acts of the company could not be held liable for subsequent acts.
The petitioner’s counsel further submitted that the provisions invoked were Sections 122(1A) and 137 of the CGST Act and not Section 132. It was contended that Section 122(1A) concerns penalty, while Section 137 is an attributive liability provision and does not itself create an offence. On this basis, it was submitted that the power of arrest under Section 69 of the CGST Act could not be mechanically exercised in the absence of an offence falling within Section 132. The petitioner also submitted that the alleged wrongful ITC had neither been quantified nor adjudicated against him under Sections 73/74 of the CGST Act, and that the departmental show-cause notices did not array him as a noticee.
The petitioner undertook to cooperate with the investigation, appear before the respondent as and when required, and not tamper with evidence or influence any witness. It was submitted that, having regard to the documentary nature of the evidence, his arrest and custodial interrogation would serve no useful purpose.
It was also submitted that the petitioner had resigned as Director on 12.07.2024, that the resignation had been uploaded on the website of the Registrar of Companies and on the GST portal on the same date, and that he had transferred all his shares in the company and had no relationship with the company after 17.07.2024. Counsel further submitted that the main accused, Deepak Singhal, had already been enlarged on regular bail by the learned Trial Court.
When the Court asked the complainant/respondent’s counsel when the alleged offence was committed and whether it was during the period when the petitioner was a Director or shareholder of the company, counsel sought time to file a reply to the query and to the bail application. Counsel for the respondent also submitted that, under the notices issued to the petitioner, no arrest could be made and that he was required to appear for interrogation.
Considering the submissions, the High Court did not finally adjudicate the petitioner’s entitlement to anticipatory bail at this stage. Instead, the Court permitted the petitioner to appear before the Investigating Officer. The Investigating Officer was directed to interrogate the petitioner in terms of the notice issued to him; however, the petitioner was directed not to be arrested in connection with Criminal Case No. DGGI/INT./INTL/163/2026-Grade-D, Zonal Unit, Jaipur.
The time sought by the respondent’s counsel for filing a reply was granted, and the matter was directed to be listed after one week. Thus, the order records interim protection from arrest while permitting interrogation and leaves the matter pending for further consideration.
Cases Discussed
- Harshendra Kumar D. v. Rebatilata Koley, (2011) 3 SCC 351 — relied upon by the petitioner for the submission that a director who had resigned before the alleged acts of the company could not be held liable for subsequent acts.
FULL TEXT OF THE JUDGMENT/ORDER OF HIGH COURT OF JUDICATURE FOR RAJASTHAN
1. Learned counsel for the petitioner submits that the petitioner has been falsely implicated in the alleged GST/ITC fraud. The petitioner resigned as Director of the concerned company on 12.07.2024, whereas the alleged bogus firms and transactions came into existence only from October 2025 onwards. Thus, there is no factual or chronological nexus between the petitioner and the alleged offences. It is further submitted that the learned Trial Court, while rejecting anticipatory bail on 28.07.2026, failed to properly appreciate the material on record. The finding regarding non-cooperation is incorrect, as the petitioner appeared through authorised counsel on 19.06.2026, sought two weeks’ time and communicated the same by email along with his vakalatnama. Thereafter, no further summons was issued to him.
2. Learned counsel for the petitioner further submits that the petitioner has neither been arrayed as an accused nor made a noticee in any show-cause notice and was summoned only under Section 70 of the CGST Act. The case is based entirely on documentary and digital evidence, including invoices, e-way bills, banking records and GST portal data, all of which are already in the possession of the investigating agency. Hence, custodial interrogation is neither necessary nor warranted.
3. Learned counsel for the petitioner also submits that in view of the petitioner’s resignation prior to the alleged transactions, no liability can be fastened upon him under Section 137 of the CGST Act, which requires the person concerned to have been in charge of and responsible for the conduct of the company’s business at the relevant time. Reliance is placed on Harshendra Kumar D. v. Rebatilata Koley, (2011) 3 SCC 351, wherein the Hon’ble Supreme Court recognised that a director who had resigned prior to the alleged acts of the company cannot be held liable for subsequent acts. He further submits that the provisions invoked are Sections 122(1A) and 137 of the CGST Act, and not Section 132 of the CGST Act. Section 122(1A) of the CGST Act concerns penalty, while Section 137 of the CGST Act is an attributive liability provision and does not itself create an offence. Therefore, the power of arrest under Section 69 of the CGST Act cannot be mechanically exercised in the absence of an offence falling within Section 132 of the CGST Act. It is also submitted that the alleged wrongful ITC has neither been quantified nor adjudicated against the petitioner under Sections 73/74 of the CGST Act, and the show-cause notices issued by the department do not even array him as a noticee.
4. Learned counsel for the petitioner on behalf of the petitioner undertakes to cooperate with the investigation, appear before the respondent as and when required, and not tamper with evidence or influence any witness. In view of the documentary nature of the evidence, the petitioner’s arrest and custodial interrogation would serve no useful purpose. Accordingly, it is submitted that the petitioner has a strong prima-facie case and deserves the protection of anticipatory bail.
5. Learned counsel for the petitioner further submits that the petitioner had resigned from the post of Director of the company on 12.07.2024, and the said fact was also uploaded on the website of the Registrar of Companies as well as on the GST portal on the same date. He further submits that the petitioner had transferred all his shares in the company and, thus, had no relationship with the company after 17.07.2024.
6. Learned counsel for the petitioner further submits that the main accused-Deepak Singhal has already been enlarged on regular bail by the learned Trial Court.
7. Learned counsel for the complainant/respondent, when asked as to when the alleged offence was committed and whether it was during the period when the petitioner was a Director or shareholder of the company, submits that he seeks time to file a reply to the said query and reply to bail application.
8. Learned counsel for the respondent also submits that under the notices issued to petitioner, no arrest can be made and he is required to appear for interrogation.
9. Considering the submission made above, this Court deems it appropriate to permit the petitioner to appear before the Investigating Officer. The Investigating Officer shall interrogate the petitioner in terms of the notice issued to him; however, the petitioner shall not be arrested in connection with the proceedings in Criminal Case No. DGGI/INT./INTL/163/2026-Grade-D, Zonal Unit, Jaipur.
10. Time prayed for filing reply is granted to learned counsel for the respondent.
11. List this matter after one week.
