TaxTMI 
TaxTMI 
2026 (6) TMI 101
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....tion Act, 1988 and 316(5) of B.N.S., Police Station-CBI/ACB, District-Lucknow, pending in the Court of Learned Special Judge, Anti-Corruption, CBI-5, Lucknow. 3. The aforesaid case has been registered on the basis of an F.I.R. lodged on 30.12.2025 against 7 named persons, including the applicant, and unknown persons, on the basis of an information received from some reliable source that some public servants of Central Goods and Service Tax (CGST), Jhansi, U.P. were indulging in corrupt and illegal activities in connivance with various private persons and they take bribe in exchange of extending favours in cases against them for tax violations. Co-accused Prabha Bhandari, I.R.S., Deputy Commissioner CGST, the applicant Anil Kumar Tiwari, Superintendent and co-accused Ajay Sharma, Superintendent were posted at CGST, Jhansi and they were indulging in such corrupt activities in criminal conspiracy with co-accused Naresh Kumar Gupta, Advocate, who acts as a middle man on behalf of several firms against whom cases have been made out for tax evasion. 4. A team of the aforesaid officials for CGST, Jhansi, had conducted searches at the office premises and go-downs of M/s Jai Ambe Plyw....
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....r and Raju Mangtani kept the white color cotton bag on the back seat of the car. The rider Krishna left the spot. Raju Mangtani and Naresh Kumar Gupta got inside the car and went to Bikanerwala restaurant. Both of them remained seated inside the car. 8. The second team informed that co-accused Ajay Sharma had moved from his residence in a white color Honda Amaze car. Two CBI officials followed him on a scooter while the other team members remained at the residence to secure it. Ajay Sharma also reached Bikanerwala restaurant. He got down from his car after which Naresh Kumar Gupta also alighted from his car. Both of them entered Bikanerwala restaurant whereas Raju Mangtani remained seated on the co-driver seat of the Baleno car. 9. The applicant had left his residence on a motorcycle. He was also being followed and he also reached Bikanerwala restaurant, went inside, joined Ajay Sharma and Naresh Kumar Gupta and got engaged in conversation with each other. Naresh Kumar Gupta came out of the restaurant at about 21:00 hours and sat on the driver's seat of the Baleno car while Raju Mangtani was already sitting inside the car. The car started moving. CBI officials followed the ca....
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.... Deputy Commissioner. The Competent Authority granted approval for the search. Search authorizations were issued in favour of the applicant, co-accused Ajay Sharma and one Ashish Kumar Awasthi. 15. The charge-sheet further states that the communications intercepted on the date of search (18.12.2025) establish that immediately after detection of irregularities, discussions were initiated regarding settlement of the matter. The applicant was in communication with co-accused Naresh Kumar Gupta, Advocate who acted as an intermediary between the accused public servants and representatives of the firms. Co-accused Prabha Bhandari visited the search premises and remained present there for several hours supervising the proceedings. Despite the seriousness of the discrepancies found, seizure documentation was kept incomplete and blank spaces were left in the seizure memos. The number of pages of seized documents was not recorded. Mandatory post search report required under departmental instructions was not submitted within the prescribed period. This was done purposely to use the seized material later as a tool for demanding and accepting undue advantages. The calls intercepted on 22.12.....
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....orded under Section 180 BNSS has been brought on record along with the supplementary affidavit. He stated that on 22.12.2025, the applicant had telephonically instructed him that Inspector Prashant Vishwakarma would come to his home and the driver should get some goods kept in a room constructed near the garage. After some time, Inspector Prashant Vishwakarma reached near the garage and called the driver by making a phone call. The driver unlocked the room constructed near the garage. Prashant Vishwakarma brought out 4-5 sacks from his car and kept in the room. The driver did not know about the contents of sacks. He locked the room and handed over the keys to the applicant's son Raghav. 19. The charge-sheet says that the sequence of events, detection of discrepancies, incomplete seizure formalities, removal of seized documents from lawful custody, structured negotiation of quantified amount, supervisory concurrence, arrangement of money by persons connected with the firms, delivery and recovery of Rs. 69,94,000/- and acknowledgment after the recovery form a complete and unbroken chain of circumstances. The coordinated acts of co-accused Prabha Bhandari, the applicant and Aja....
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....-CBI has submitted that the bribe amount contains shares of all accused persons, including the applicant. The entire operation had taken place at railway tiraha which is near the railway station from where the applicant was arrested. He has submitted that 37 bars of silver were recovered from the applicant's house. 25. Per contra, Sri. Aakash Prasad, the learned counsel for the respondent-CBI, has submitted that the applicant was actively supervising and controlling the CGST search proceedings conducted on 18.12.2025. The conversations intercepted on that date clearly establish that he directed sub-ordinate officials regarding the search and discussed the magnitude of undeclared stock and potential tax liability with co-accused Naresh Kumar Gupta, Advocate. The applicant was in continuous conversation with his colleague Ajay Sharma, Superintendent regarding the matter. The applicant had arranged the meeting for handing over of the bribe money in a restaurant which belongs to a family member of the applicant. The applicant was physically present in the restaurant at the time of transfer of bribe money. It is established that the applicant has played a crucial role along with ....
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....y 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. * * * 42. When the undertrial prisoners are detained in jail custody to an indefinite period, Article 21 of the Constitution is violated. Every person, detained or arrested, is entitled to speedy trial, the question is: whether the same is possible in the present case." 30. In P. Chidambaram v. CBI: (2020) 13 SCC 337, the Hon'ble Supreme Court held that:- "21. The jurisdiction to grant bail has to be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case. The following factors are to be taken into consideration while considering an application for bail: (i) the nature of accusation and the severity of the punishment in ....
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....ntence. After all, an economic offence cannot be classified as such, as it may involve various activities and may differ from one case to another. Therefore, it is not advisable on the part of the court to categorise all the offences into one group and deny bail on that basis. Suffice it to state that law, as laid down in the following judgments, will govern the field: Precedents 91.P. Chidambaram v. Directorate of Enforcement [(2020) 13 SCC 791: "23. Thus, from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench [Gurbaksh Singh Sibbia v. State of Punjab, (1980) 2 SCC 565] 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 befal....
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....of the punishment should be taken into consideration. 40. 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. *** 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 offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge-sheet is already filed before the Spe....
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....n without anything more would not make it an offence under Section 7 or Sections 13(1)(d)(i) and (ii), respectively of the Act. Therefore, under Section 7 of the Act, in order to bring home the offence, there must be an offer which emanates from the bribe-giver which is accepted by the public servant which would make it an offence. Similarly, a prior demand by the public servant when accepted by the bribe-giver and in turn there is a payment made which is received by the public servant, would be an offence of obtainment under Sections 13(1)(d)(i) and (ii) of the Act. 88.5. (e) The presumption of fact with regard to the demand and acceptance or obtainment of an illegal gratification may be made by a court of law by way of an inference only when the foundational facts have been proved by relevant oral and documentary evidence and not in the absence thereof. On the basis of the material on record, the court has the discretion to raise a presumption of fact while considering whether the fact of demand has been proved by the prosecution or not. Of course, a presumption of fact is subject to rebuttal by the accused and in the absence of rebuttal presumption stands. 88.6....
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....and, therefore, direct evidence to establish the same may not be always forthcoming. Proof or otherwise of such conspiracy is a matter of inference and the court in drawing such an inference must consider whether the basic facts i.e. circumstances from which the inference is to be drawn have been proved beyond all reasonable doubt, and thereafter, whether from such proved and established circumstances no other conclusion except that the accused had agreed to commit an offence can be drawn. Naturally, in evaluating the proved circumstances for the purposes of drawing any inference adverse to the accused, the benefit of any doubt that may creep in must go to the accused." 35. In State v. Anup Kumar Srivastava: (2017) 15 SCC 560, it was held that:- "26. Similarly, the law on the issue emerges to the effect that conspiracy is an agreement between two or more persons to do an illegal act or an act which is not illegal by illegal means. The object behind the conspiracy is to achieve the ultimate aim of conspiracy. For a charge of conspiracy means knowledge about indulgence in either an illegal act or a legal act by illegal means is necessary. In some cases, intent of unlawful....
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....e nature of the evidence also is pertinent. The punishment to which the party may be liable, if convicted or conviction is confirmed, also bears upon the issue. 8. Another relevant factor is as to whether the course of justice would be thwarted by him who seeks the benignant jurisdiction of the Court to be freed for the time being [Patrick Devlin, The Criminal Prosecution in England (Oxford University Press, London 1960) p. 75 - Modern Law Review, Vol. 81, Jan. 1968, p. 54.] 9. Thus the legal principles and practice validate the Court considering the likelihood of the applicant interfering with witnesses for the prosecution or otherwise polluting the process of justice. It is not only traditional but rational, in this context, to enquire into the antecedents of a man who is applying for bail to find whether he has a bad record - particularly a record which suggests that he is likely to commit serious offences while on bail. In regard to habituals, it is part of criminological history that a thoughtless bail order has enabled the bailee to exploit the opportunity to inflict further crimes on the members of society. Bail discretion, on the basis of evidence about th....
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....of bail and the same should and ought always to be coupled with other circumstances warranting the grant of bail. The nature of the offence is one of the basic considerations for the grant of bail - more heinous is the crime, the greater is the chance of rejection of the bail, though, however, dependent on the factual matrix of the matter." (Emphasis supplied) 56. In Kalyan Chandra Sarkar v. Rajesh Ranjan, (2004) 7 SCC 528, this Court held that although it is established that a court considering a bail application cannot undertake a detailed examination of evidence and an elaborate discussion on the merits of the case, yet the court is required to indicate the prima facie reasons justifying the grant of bail. 57. In Prasanta Kumar Sarkar v. Ashis Chatterjee, (2010) 14 SCC 496, this Court observed that where a High Court has granted bail mechanically, the said order would suffer from the vice of nonapplication of mind, rendering it illegal. This Court held as under with regard to the circumstances under which an order granting bail may be set aside. In doing so, the factors which ought to have guided the Court's decision to grant bail have also been de....
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....ial balance and function as a significant instrument for protection of human rights and security of the collective. This is because, fundamentally, laws are made for their obedience so that every member of the society lives peacefully in a society to achieve his individual as well as social interest. That is why Edmond Burke while discussing about liberty opined, "it is regulated freedom". 63. It is also to be kept in mind that individual liberty cannot be accentuated to such an extent or elevated to such a high pedestal which would bring in anarchy or disorder in the society. The prospect of greater justice requires that law and order should prevail in a civilised milieu. True it is, there can be no arithmetical formula for fixing the parameters in precise exactitude but the adjudication should express not only application of mind but also exercise of jurisdiction on accepted and established norms. Law and order in a society protect the established precepts and see to it that contagious crimes do not become epidemic. In an organised society the concept of liberty basically requires citizens to be responsible and not to disturb the tranquility and safety which every well-m....
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....hers and more differently for the attainment of antithetic desires. This intertwined network is difficult to delineate within defined spheres of conduct within which freedom of action may be confined. Therefore, liberty would not always be an absolute licence but must arm itself within the confines of law. In other words, there can be no liberty without social restraint. Liberty, therefore, as a social conception is a right to be assured to all members of a society. Unless restraint is enforced on and accepted by all members of the society, the liberty of some must involve the oppression of others. If liberty be regarded a social order, the problem of establishing liberty must be a problem of organising restraint which society controls over the individual. Therefore, liberty of each citizen is borne of and must be subordinated to the liberty of the greatest number, in other words common happiness as an end of the society, lest lawlessness and anarchy will tamper social weal and harmony and powerful courses or forces would be at work to undermine social welfare and order. Thus the essence of civil liberty is to keep alive the freedom of the individual subject to th....
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....egation made by the prosecution in regard to the existence of prima facie case, gravity of offence, and the allegation of tampering with the witness by threat and inducement when on bail.... non-consideration of the same and grant of bail solely on the ground of long incarceration vitiated the order..." 20.4.3. In Brijmani Devi v. Pappu Kumar [(2022) 4 SCC 497], this Court held that the possibility of the accused absconding or threatening witnesses had a direct bearing on the fairness of the trial. In serious offences, such apprehensions - when reasonably supported by record - must weigh against the grant of bail. 20.4.4. Similarly, in Ishwarji Nagaji Mali v. State of Gujarat [ Criminal Appeal No. 70 of 2022 dated 18.01.2022], this Court reiterated that the fact that the prosecution case rests on circumstantial evidence is not a valid ground to release the accused on bail, especially where a complete chain of circumstances has been prima facie established during investigation. The Court cancelled the bail granted by the High Court in that case holding that: "6. .... the High Court has not at all adverted to the material collected during the course of the ....
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....of the offence or to disregard the case put forth by the prosecution. As repeatedly held by this Court, such factors are not standalone grounds for the grant of bail in heinous offences involving murder. The reasoning adopted by the High Court to justify the grant of bail is, therefore, contrary to settled legal principles." 39. In Netsity Systems (P) Ltd. v. State (NCT of Delhi): 2025 SCC OnLine SC 2079, the Hon'ble Supreme Court was deciding twin appeals against a final order passed by the High Court of Delhi by which the petitions filed against an Order passed by the Additional Sessions Judge upholding the grant of bail to the accused persons by the Additional Chief Metropolitan Magistrate were dismissed by the High Court. The accusation against the accused husband and his co-accused wife was that they had taken Rs. 1,90,00,000/- and promised to transfer certain land in favour of the appellant. However, it was subsequently discovered that the said land had not only been previously mortgaged but had also been sold to a third-party. Both the accused had filed pre-arrest bail applications bearing Bail Applications, which had been dismissed by the Session Court. Thereafter, the p....
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....mitted, the anticipatory bail applications were dismissed. After 09.04.2019, the interim orders were specifically continued, by Orders dated 31.07.2019, 31.01.2020 and 11.10.2022. 19. We note that the Order dated 01.02.2023 dismissing the anticipatory bail applications detailed the conduct of the accused and thereafter, considered and dismissed the said petitions on merits. We find the reasoning employed in Order dated 01.02.2023, as recorded by us above, is fully justified in the facts and circumstances. In this backdrop, the ACMM, despite being made aware of the High Court's Order dated 01.02.2023 and even noting the same, proceeded on the simplistic premise that since the Chargesheet had been submitted, no useful purpose would be served by taking the accused into custody, particularly as the stand taken by the IO was that custodial interrogation was not required. Such reasoning, in our view, is untenable, inasmuch as the same glossed over the private respondents' conduct, including undertakings made before a higher Court viz. the High Court." 40. Therefore, the mere fact that a charge-sheet has been filed, cannot be a ground to enlarge the applicant on bail a....
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....Commissioner CGST, the applicant Anil Kumar Tiwari, Superintendent and co-accused Ajay Sharma, Superintendent were posted at CGST, Jhansi and they were indulging in corrupt and illegal activities in connivance with various private persons and they take bribe in exchange of extending favours in cases against them for tax violations, in criminal conspiracy with co-accused Naresh Kumar Gupta, Advocate, who acts as a middle man on behalf of several firms against whom cases have been made out for tax evasion. A team of the aforesaid officials for CGST had conducted searches at the office premises and go-downs of M/s Jai Ambe Plywood and M/s Jai Durga Hardware on 18.12.2025 and had seized a huge undeclared stock of material and documents relating to tax evasion. Proprietors of the firms were trying to get their matter settled through Naresh Kumar Gupta, Advocate, who contacted the applicant for settlement of the matter in lieu of illegal gratification. The applicant informed Naresh Kumar Gupta that there was a lot of undeclared stock of material and incriminating evidences against the parties were found. The applicant also informed that 'Madam' Prabha Bhandari was present at the premises....
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....s. Three sacks and certain miscellaneous documents mentioned in the seizure list prepared on 18.12.2025 were missing from the official custody. The three missing sacks containing records related to the searched firms, were recovered from a room near the garage in the private residence of the applicant. 46. The communications intercepted between 19.12.2025 and 25.12.2025 show structured negotiation of quantified amounts. Conversations between the applicant and co-accused Ajay Sharma routed through Naresh Kumar Gupta repeatedly refer to specific figures such as 'thirty', 'ten' and total 'seventy'. Additional intercepted calls indicate that initially Rs. 1.5 Crore was demanded. After a WhatsApp call was received from co-accused Prabha Bhandari, negotiations were stopped. In that conversation, the applicant and co-accused Ajay Sharma expressed frustration and stated that 'Madam' was not agreeing to lower the amount discussed earlier and the matter could not be finalized without her approval. WhatsApp call log confirm that Prabha Bhandari made a call to accused Ajay Sharma. A call between Lokesh Kumar Tolani and Ishpreet Bedi was intercepted in which Lokesh Kumar Tolani mentioned dem....