TaxTMI 
TaxTMI 
2026 (6) TMI 390
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....pretext of scrutiny of returns and E-Way bills for a period of 01.04.2024 to 27.01.2026, it has been alleged by the complainant/respondent that irregularities have been detected in the transactions of goods, and that the abovesaid irregularities suggest that invoices were issued and received without actual supply of goods. According to petitioner, on the basis of abovementioned allegations, he was arrested on 12.02.2026 and since then, he is in custody. The petitioner has further alleged that during the course of investigation, he had fully cooperated with the officers of the respondent and supplied all the requisite documents, but despite cooperation and collection of evidence, he has been arrested. As per petitioner, his arrest is ex facie illegal being violative of safeguards enshrined under Section 35 of BNSS. It has also been alleged by the petitioner that the entire evidence to be collected by the Investigating Agency is documentary in nature, and therefore, his incarceration in judicial custody is not likely to serve any purpose. Hence, the request for bail. 3. The respondent-State has opposed the present petition. A reply has been filed. It has been alleged by the respon....
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....d that in fact, all the relevant documents showing the business being run by the petitioner, such as GST invoices, E-Way bill etc. were handed over to the officer of the respondent, proving that the business was actually being run by the petitioner's firm and there was no illegal claim of ITC without actual business transaction, but the officer of respondent failed to look into the valid reasoning of the petitioner and illegally arrested him on 12.02.2026. 8. In addition to above, it has also been contended by learned counsel for the petitioner that otherwise also, the petitioner has already faced incarceration for a period of more than three-and-a-half months, and that the offence is punishable with maximum imprisonment up to five years. As per learned counsel for the petitioner, the entire evidence is documentary in nature, which has already been collected, and therefore, detention of petitioner in judicial lockup is not likely to serve any purpose. In view of above, the benefit of bail has been sought. 9. In support of his arguments, the learned counsel for the petitioner has referred to the principles of law laid down by the Hon'ble Supreme Court of India in the following....
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....CC 452'. The Hon'ble Supreme Court of India cancelled the bail granted to the respondent/accused, who was prosecuted for an economic offence. The Hon'ble Supreme Court of India, took note of the fact that there are five charge sheets against the respondent/accused regarding laundering bribe money. In the abovementioned case, the Hon'ble Supreme Court of India has detailed the factors which should be kept in mind while granting bail:- "a) the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. b) it has to be kept in mind that for purpose of granting bail, the Legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the Court dealing with the grant of bail can only satisfy it as to whether there is a genuine case against the accused and that the prosecu....
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....observed by the Hon'ble Supreme Court of India in the abovementioned case that 'the figures with regard to the tax demand and the tax collected would, in fact, indicate some force in the petitioners' submission that the assessees are compelled to pay tax as a condition for not being arrested. Sub-section (5) to Section 74 of the GST Acts gives an option to the assessee and does not confer any right on the tax authorities to compel or extract tax by threatening arrest. This would be unacceptable and violative of the rule of law'. 18. In the case of 'Sanjay Chandra v. CBI' (2012) 1 SCC 40, the Hon'ble Supreme Court of India has ruled that the benefit of bail cannot be denied merely in view of severity of the offence, and that the Court ought to be conscious of the right to speedy trial bestowed on the account by virtue of Article 21 of the Constitution of India. 19. The Hon'ble Supreme Court of India in the case of 'Gurcharan Singh and Others v. State' AIR 1978 SC 179, has observed that 'two paramount considerations, while considering petition for grant of bail in non-bailable offence, apart from the seriousness of the offence, are the likelihood of the accused fleeing from....
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....), the Hon'ble Supreme Court of India deliberated upon the documentary and electronic nature of evidence as well as the prolonged trial in the matters pertaining to tax evasion under the CGST Act. In the above mentioned case, the accused had undergone imprisonment for a period of about 4 months, and in the above said circumstances, the Hon'ble Supreme Court of India opined as follows:- "In considering the application for bail, it is noted that the petitioner was arrested on 21.07.2022 and while in custody, the investigation has been completed and the charge sheet has been filed. Even if it is taken note that the alleged evasion of tax by the petitioner is to the extent as provided under Section 132(1)(l)(i), the punishment provided is, imprisonment which may extend to 5 years and fine. The petitioner has already undergone incarceration for more than four months and completion of trial, in any event, would take some time. Needless to mention that the petitioner if released on bail, is required to adhere to the conditions to be imposed and diligently participate in the trial. Further, in a case of the present nature, the evidence to be tendered by the respondent would essent....
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....t thing to do on the facts and in the circumstances of a case. 26. Recently, in the case of 'Tapas Kumar Palit Vs. State of Chhattisgarh', 2025 SCC Online SC 322, the Hon'ble Supreme Court of India has observed that "if an accused is to get a final verdict after incarceration of six to seven years in jail as an undertrial prisoner, then, definitely, it could be said that his right to have a speedy trial under Article 21 of the Constitution has been infringed". It has also been observed by the Hon'ble Supreme Court of India in the abovementioned case that "delays are bad for the accused and extremely bad for the victims, for Indian society and for the credibility of our justice system, which is valued. Judges are the masters of their Courtrooms and the Criminal Procedure Code provides many tools for the Judges to use in order to ensure that cases proceed efficiently". 27. While following the abovementioned guidelines, in the case of 'Atul Aggarwal V/s State of Punjab & Ors.' CRM-M-21915-2026, the benefit of bail was accorded to accused facing trial for the commission of offence punishable under Sections 132(1)(c)(1 sub-clause (i)) of CGST, when his custody period was three mon....