TaxTMI 
TaxTMI 
2026 (1) TMI 104
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.... per the table in the charge sheet tax due is Rs. 21,64,35,395/-. Petitioner is the Proprietor of A.R. Steel and he is stated to be due of Rs. 24,89,630/-. Sri Nasir Ahmed who is alleged of tax due of Rs. 18,57,88,319/- has been granted anticipatory bail. The petitioner alleged to have escaped at search on 10.09.2025 and he has been issued with summons under Section 69 dated 10.10.2025. Petitioner has been issued with summons under Section 70 of the CGST Act to appear before the Senior Intelligence Officer, DGGI, Bengaluru on 21.10.2025 and therefore, he apprehends his arrest. In the year 2024, the State Officers have adjudicated the matter and order of adjudication dated 30.08.2024 indicate that tax due is Rs. 27,10,123/- and it has been paid by the petitioner. The order of adjudication dated 25.02.2025 indicate that the son of petitioner is tax due of Rs. 11,90,301/-. GST return filed by the petitioner has been adjudicated and it has been finalized. The petitioner has been granted anticipatory bail in Crime No. 162/2025. The petitioner participated in State adjudication. If the amount adjudicated is not paid after demand, then it amounts to offence. The offence is compoundable un....
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.... the intelligence inputs, the investigation conducted has unearthed a syndicate of individuals, and entitled who have indulged themselves into creation of bogus entities; availing of inadmissible and fraudulent Input Tax Credit without actual underlying supply of goods and/or services; issuance of invoices without underlying supply of goods and/or services. 7. The instant issue is related to fraudulent availment and passing of fake input tax credit, without actual supply of goods/services. The petitioner, Sri Akram Pasha, Proprietor of M/s. A.R.Steel, (GSTIN-29AHBPA2384H1ZJ) having principal place of business at 105, Lashkar Mohalla Gandhinagar, Udayagiri MP Main Road, Mysore is engaged in availment of irregular and fraudulent input tax credit to the tune of Rs. 31.33 Crores on the strength of fake invoices without receipt of any goods/services, either from the non-existing entities or from the entities which are involved in the chain of fake invoicing. A coordinated search on 10.09.2025 at 13 locations were conducted under Section 67(2) of CGST Act, 2017. As per search authorization issued by the competent authority, a search proceeding was conducted at both of the residential ....
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....s the power of inspection, seizure and arrest under Chapter XIV of the Act. Under section 69 of the Act, when the person has reasons to believe that the person has committed any offence under section 132, the Commissioner may by order authorize any officers of the Central tax to arrest such person. 13. Section 132 of the CGST Act is reproduced hereunder: "132. Punishment for certain offences.-(1) Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences, namely :- (a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax; (b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input-tax credit or refund of tax; (c) avails input-tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input-tax credit without any invoice or bill; (d) collects any amount as tax but fails to pay the same to the Government ....
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....a term which may extend to one year and with fine; (iv) in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both. (2) Where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine. (3) The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and sub-section (2) shall, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, be for a term not less than six months. (4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Act, except the offences referred to in sub-section (5) shall be non-cognizable and bailable. (5) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause (i) o....
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....The term of imprisonment and the amount of fine, is dependent on the amount involved in the offence, or in some cases, the act committed by the offender. The provision further categorises certain offences as cognizable and non-bailable, if the amount involved exceeds 16. Rupees five hundred lakhs. These offences relate to persons who supply goods or services without issuing invoices, or issue invoices without supplying goods or services and thus wrongfully availing input-tax credit ; or to persons who collect tax but fail to pay it to the Government beyond a period of three months from date on which payment becomes due. All other offences listed under the Act have been categorised as non-cognizable and bailable. 17. Section 138 of the CGST Act further dilutes the heinousness of offences under the Act. The said section makes every offence under the Act compoundable except for certain circumstances which have been specified under different clauses to the proviso of section 138. The relevant section has been reproduced hereunder : "138. Compounding of offences.-(1) Any offence under this Act may, either before or after the institution of prosecution, be compounded by th....
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....s 69 and 70 of the CGST Act are reproduced hereunder : "69. Power to Arrest.-(1) Where the Commissioner has reasons to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer of Central tax to arrest such person. (2) Where a person is arrested under sub-section (1) for an offence specified under sub-section (5) of section 132, the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a magistrate within twenty-four hours. (3) Subject to the provisions of the Code of Criminal Procedure, 1973 (2 of 174),- (a) where a person is arrested under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the magistrate ; (b) in the case of a non-cognizable and bailable offence, the Deput Commissioner or the Assistant Commissioner shall, for the purpose of....
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....and services tax law, with a view to study the adequacy of the safeguards and authorisation built into the text of the statute, the interplay between these provisions and the standards of arrest has to be established through judicial precedents, as well as other sources such as the Constitution of India and general statutes such as the Code of Criminal Procedure. 21. On the other side, the case of Shravan. A Mehra v. Superintendent of Central Tax, Anti evasion, Commissionerate Manu/KA/0875/2019 is the one that squarely applies to the present case. In this matter, bail was granted in relation to offences under the Act in view of the fact that the offences were not punishable with imprisonment for more than five years. In this case, the petitioner was alleged of having obtained invoices from the company of the respondent without delivery of the goods and thereby evading payment of tax and committing an offence under section 132(1)(b) of the Act. Therein, the petitioner once appeared before the authorities concerned but on a subsequent summon, they were apprehending arrest because another witness who was called to tender statement was arrested by the police. Thus, an application fo....
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.... on either side including the one rendered by the Constitution Bench of this court, it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would be fall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of 'grave offence' and in such circumstance while considering the application for bail in such matters, the court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor w....
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....Sanjay Chandra v. CBI (2012) 1 SCC 40; (2012) 1 SCC (Cri) 26; (2012) 2 SCC (L&S) 397. The High Courts and courts in the district judiciary of India must enforce this principle in practice, and not forego that duty, leaving this court to intervene at all times. We must in particular also emphasise the role of the district judiciary, which provides the first point of interface to the citizen. Our district judiciary is wrongly referred to as the 'subordinate judiciary'. It may be subordinate in hierarchy but it is not subordinate in terms of its importance in the lives of citizens or in terms of the duty to render justice to them. The High Courts get burdened when courts of first instance decline to grant anticipatory bail or bail in deserving cases. This continues in the Supreme Court as well, when High Courts do not grant bail or anticipatory bail in cases falling within the parameters of the law. The consequence for those who suffer incarceration are serious. Common citizens without the means or resources to move the High Courts or this court languish as undertrials. Courts must be alive to the situation as it prevails on the ground in the jails and police stations....
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....not only for the accused but for the entire family and at times for the entire community. Most people do not make any distinction between arrest at a pre-conviction stage or post-conviction stage." 29. A three-judge bench of the Honourable Supreme Court in the case of Nathu Singh v. State of U. P. (2021) 6 SCC 64 has called for a liberal interpretation in the cases relating to grant of anticipatory bail, when it observed : "19. At first blush, while this submission appears to be attractive, we are of the opinion that such an analysis of the provision is incomplete. It is no longer res integra that any interpretation of the provisions of section 438 CrPC has to take into consideration the fact that the grant or rejection of an application under section 438 CrPC has a direct bearing on the fundamental right to life and liberty of an individual. The genesis of this jurisdiction lies in article 21 of the Constitution, as an effective medium to protect the life and liberty of an individual. The provision therefore needs to be read liberally, and considering its beneficial nature, the courts must not read in limitations or restrictions that the Legislature have not explicitly....
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....he discretion of the court." 31. The Hon'ble Delhi High Court in the case of Tarun Jain vs. Directorate General of GST Intelligence DGGI (2021 SCC Online Del 5733) considering the similar case has observed as under: 52. In the present case, the petitioner has been accused of wrongfully utilizing the input-tax credit amounting to Rs. 72 crores, an offence under section 132(1)(b) and (c). Since the alleged amount exceeds five hundred lakhs, the accused can be punished with a maximum of five year of imprisonment and with fine. It is equally important to highlight that the offences under the Act are bailable and non-cognizable except for the offence under section 132(5) of the Act. Additionally, under section 135 of the Act, in any prosecution under the Act requiring culpable mental state, the court is bound to presume culpable mental state of the accused. The section further states that the accused will have a defense to prove that he had no such mental state. Also, section 138 of the Act states that the offences under the Act shall be compoundable either before or after the prosecution. 53. The task before this court is two-fold, first being to ensure that no unw....