TaxTMI 
TaxTMI 
2026 (2) TMI 1262
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....No. COMA/58595/2025, dated 14.11.2025, titled as Superintendent (Anti-Evasion), CGST Commissionerate, Ludhiana v. Vaishno Dass and others, filed under Section 132(1)(c)(i) of the Central Goods & Service Tax Act, 2017 (for short 'CGST Act') and Punjab Goods and Services Tax, 2017 (for short 'PGST Act'), punishable under Section 132(1)(i) read with Section 20 of the Integrated Goods and Services Tax, 2017 (for short 'IGST Act'). 3. The present case emanates from an investigation conducted by the complainant department against three firms, namely M/s Vasu Multimetals Pvt. Ltd., M/s SVM Multimetals Pvt. Ltd. and M/s Ingottastic LLP, all having their principal places of business at Ludhiana. As per the prosecution, the said firms had availed Input Tax Credit (for short 'ITC') on the basis of invoices issued by suppliers whose GST registrations were either cancelled suo motu, suspended or found to be non-existent or not operating from their registered places of business. It was alleged that fraudulent input tax credit to the tune of approximately Rs.53 crores was availed. Pursuant to a search warrant dated 15.09.2025 issued by the Joint Commissioner, CGST Commissionerate, Ludhiana, se....
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....ement in the commission of any alleged offence. With regard to M/s Ingottastic LLP, it is submitted that petitioner Vaishno Dass and Harshbir Singh Sokhi are partners therein. However, the said LLP is a separate legal entity and its business activities are independent and distinct from those of the respondent companies. No nexus has been established between the alleged acts and the petitioners merely on account of their association with the said LLP. The allegations levelled in the complaint, even if taken at face value, do not disclose the essential ingredients of the offences alleged against the petitioners. It is further argued that the procedural safeguards under Section 41(1) of the Code of Criminal Procedure were not complied with and as such, the arrest of the petitioners is in violation of Articles 14 and 21 of the Constitution of India. There was no circumstance appearing on record justifying the necessity of their arrest. The provisions of Section 73 and 74 of the CGST Act had not been followed. No reasonable satisfaction had been recorded. The prosecution case rests on vague and omnibus allegations without specific attribution of criminal conduct, rendering the continuat....
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....f the offence and role attributed to the petitioners disentitle them to the discretionary relief of bail. It is argued by the learned counsel for the respondent that the statute does not condition or circumscribe the exercise of power upon prior completion of adjudication proceedings under Sections 73 or 74 of the Act. Sections 73 and 74 operate in the realm of civil adjudication dealing with assessment, determination, and recovery of tax, interest, and penalty. In the present case, the fraudulent availment and utilization of ITC amounting to Rs. 71.86 crores, based on bogus invoices valuing Rs. 471.15 crores, has been established during investigation through documentary records, financial trail, GST returns, e-way bill analysis, and digital evidence, which is overwhelming in nature and sufficient to attract the provisions of Section 132 of the CGST Act and consequently to justify arrest under Section 69 of CGST Act, without awaiting completion of adjudication under Sections 73 or 74 of CGST Act. 6. It is further argued that the arrest of the petitioners was effected after collecting evidence and conducting thorough inquiry as well as after obtaining requisite sanction from the ....
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.... (c) avails input tax credit using such invoice or bill referred to in clause (b); shall be punishable-- (i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine. (ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred lakh rupees, with imprisonment for a term which may extend to three years and with fine; (iii) in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for a term which may extend to one year and with fine; 10. A bare perusal of the above mentioned provision leaves no room to doubt that the offences alleged carry minimum punishment of 06 months and a maximum punishment of 05 years of impris....
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....ments, for grant of bail on the grounds that offences alleged against them were serious involving deep rooted planning, causing huge loss to the State exchequer and that there was possibility of the accused persons tampering with the evidence. The Hon'ble Supreme Court observed as under : "The grant or refusal to grant bail lies within the discretion of the court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required. X XXX XXX 46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the of....
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....on and standing of the accused; (vi) likelihood of the offence being repeated; (vii) reasonable apprehension of the witnesses being tampered with; and (viii) danger, of course, of justice being thwarted by grant of bail. 15. Reference may now be made to the citations relied upon by the petitioners in support of their prayer for grant of bail. In Ratnambar Kaushik's case (supra), the High Court had dismissed an application filed by the accused for grant of regular bail in the proceedings for the offences alleged against him under Sections 132(1) read with Section 132(5) of the CGST Act. While observing that the alleged evasion of tax by the accused was to the extent as provided under Section 132(1)(i) and the punishment provided was imprisonment which might extend to 05 years and fine, the fact that the accused had already undergone incarceration for 04 months and completion of trial was likely to take time and further that the evidence to be tendered was of documentary nature, the Hon'ble Supreme Court had passed an order for release of the accused on bail. In Ashutosh Garg's case (supra), the High Court of Judicature for Rajasthan at Jaipur had dismis....
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....Singla's case and Manish Kumar's case (supra). 18. Now adverting to the present case. The allegations against the petitioners are that while being Directors/partners of M/s Vasu Multimetals Pvt. Ltd., M/s SVM Multimetals Pvt. Ltd. and M/s Ingottastic LLP, they had knowingly availed and utilized fraudulent Input Tax Credit to the tune of Rs.53 crores on the basis of invoices issued by suppliers whose GST registrations were cancelled, suspended or who were found to be non-existent or not operating from their registered places of business. However, these claims are yet to be determined by the competent authority of the respondent by making proper assessment/adjudication. As such, it is only after assessment/adjudication that the liability of the petitioners with regard to exact amount of evasion of tax is to be determined under the relevant provisions of CGST Act. A complaint has already been filed against the petitioners. They are in custody since 17.09.2025. Nothing has been shown to this Court which may justify the further detention of the petitioners in prison. 19. On consideration of the above discussed facts and circumstances and also considering that the alleged offences ....