TaxTMI 
TaxTMI 
2026 (6) TMI 883
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.... 132(1),(c),(f),(h),(i) of the Central Goods and Services Tax Act, 2017 (for short, 'CGST Act') against accused petitioner-Umang Garg and under Sections 132(1)(b),(c),(i) of the CGST Act against accused petitioner-Ashish Jain. 2. Since both these bail applications arise out of the similar set of facts and involve common questions of law and fact, they were heard together and are being decided by this common order. 3. Learned counsel for the petitioners submitted that the present prosecution arises out of allegations pertaining to wrongful availment and passing of Input Tax Credit ('ITC') through alleged fake and goods-less invoices under the provisions of the CGST Act, wherein the offences alleged are triable by magistrate and carry a maximum punishment of five years. It was submitted that accused petitioner Umang Garg was arrested on 20.03.2026 and accused petitioner Ashish Jain was arrested on 06.02.2026 pursuant to proceedings initiated by the respondent-DGGI in relation to alleged operation of fake firms and issuance of goods-less invoices. 4. Learned counsel further submits that the allegations against the accused petitioner-Umang Garg pertain to alleged wrongful util....
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....ion 69 of the CGST Act contains two mandatory requirements, namely, recording and furnishing of 'reasons to believe' by the respondents and communication of proper 'grounds of arrest' to the accused in writing. It is submitted that no written 'reasons to believe' recorded by the respondents were ever supplied to the petitioners and the arrest memos supplied to the petitioners are purely mechanical and stereotyped proforma documents lacking foundational factual particulars such as relevant financial period, specific firms involved, nature of transactions, exact role attributed to the petitioners and necessity of arrest. Furthermore, the CBIC Instruction No. 01/2025-GST dated 13.01.2025 and Instruction No. 02/2022-23 (GST Investigation), issued by the respondent department itself recognize a distinction between 'reasons for arrest' and 'grounds of arrest' and mandate that grounds of arrest be separately furnished to the arrested person in writing. 8. It is further contended that the prosecution case is entirely documentary and electronic in nature and all relevant devices and documents are already in possession of the Department, custodial interrogation is no longer required and t....
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....led that Ashish Jain had issued goods-less invoices to firms namely M/s Umang Impex India Pvt. Ltd., M/s New Growth Petrochem India Pvt. Ltd., and M/s U G India Pvt. Ltd., allegedly operated by petitioner-Umang Garg. 11. It was further submitted that accused petitioner-Ashish Jain, in his own statements recorded under Section 70 of the CGST Act admitted the issuance of fake goods invoices to firms operated by petitioner-Umang Garg and other beneficiary entities and during the search proceedings conducted on 05.02.2026 and 06.02.2026 at premises of petitioner-Ashish Jain, various documents and electronic devices including mobile phones were seized. It was argued that a large number of incriminating WhatsApp chats recovered from the seized mobile phones clearly establish involvement of petitioner-Ashish Jain in operation of fake firms and issuance of goods-less invoices in lieu of commission. 12. Learned counsel further submitted that petitioner-Ashish Jain was operator of as many as 29 fake firms and generated fake ITC of Rs. 66,52,73,095/- and used to receive details from beneficiary firms for issuance of goods-less invoices through contract staff and thereafter forwarded suc....
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.... fake firms and was engaged in issuance of goods-less invoices for passing of fraudulent ITC to beneficiary entities and the statements recorded under Section 70 of the CGST Act, electronic devices seized during search proceedings, WhatsApp chats, forensic analysis and other documentary material, which prima facie connect the accused petitioners with operation of fake firms and issuance of invoices without actual supply of goods. 17. As far as the contention with regard to furnishing of grounds of arrest is concerned, the law on this point is no more res integra in view of the judgments rendered by the Hon'ble Apex Court in the matters of: Pankaj Bansal v. Union of India & Ors., (2024) 7 SCC 576; Prabir Purkayastha v. State (NCT of Delhi), (2024) 8 SCC 254; Vihaan Kumar v. State of Haryana & Anr., (2025) 5 SCC 799 and Mihir Rajesh Shah v. State Of Maharashtra And Anr., 2025 INSC 1288, that it is mandatory to supply the grounds of arrest in writing in all cases without exception. 18. The Hon'ble Apex Court in the case of Prabir Purkayastha (supra) has drawn a distinction between 'reasons for arrest' and 'grounds of arrest.' The relevant extract is reproduced hereunder:- ....
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....c offences such as under PMLA where the grounds of arrest in writing be furnished to the arrested person on arrest simultaneously." 20. Therefore, the core principles emerging from the aforesaid judgments are as follows:- (i) That, shortly after the arrest of the accused, the authorities are required to furnish written grounds of arrest to the arrested person; (ii) That, 'reasons for arrest' are generally formal and broad in nature, and mere non-elaboration thereof would not ipso facto render the arrest illegal and; (iii) That, failure to communicate the grounds of arrest in writing would vitiate the arrest and render the same illegal. 21. In the instant case, the record reflects that prior to their arrest, the petitioners were summoned under Section 70 of the CGST Act and their statements were recorded during the course of investigation. The accused petitioner-Umang Garg was formally arrested on 20.03.2026 vide arrest warrant memo bearing DIN No. 202603DNN20000020475 and, along with the same, written grounds of arrest were also furnished to him, which bear his acknowledgment signatures and similarly, grounds of arrest were also furnished to accused....