Facts of the Case

The petitioners, namely Rajinder Singh @ Lovely, Avtar Singh, Pawan Kumar Sharma @ Kala Pandit, Sachin Kumar, Randhir Singh, Balwinder Singh, and Ajay Kumar, filed separate petitions seeking regular bail in connection with FIR No. 8 dated 21.08.2020 registered by the Vigilance Bureau, Phase-I, SAS Nagar, Mohali.

The FIR alleged a large-scale Goods and Services Tax (GST) evasion racket operating in the State of Punjab. Based on intelligence inputs and legally intercepted mobile phone conversations, the investigating agency alleged that officials of the GST Department, traders, transporters, and intermediaries were involved in a conspiracy to facilitate tax evasion.

It was alleged that monthly bribes were paid to GST officials, enabling inter-State and intra-State transactions without proper accounting or payment of tax, thereby allowing fraudulent availment of bogus Input Tax Credit (ITC).

 

Issues Involved

  1. Whether the petitioners were entitled to regular bail after completion of investigation.
  2. Whether prolonged custody was justified when the challan had already been filed.
  3. Whether delay in prosecution due to pending sanction against public officials justified grant of bail.
  4. Whether parity with co-accused already granted bail should be extended to the petitioners.

 

Petitioner’s Arguments

  • The petitioners had remained in judicial custody for a considerable period.
  • Investigation against them had already been completed and the challan had been presented before the trial court.
  • Their implication was primarily based upon statements of co-accused recorded during investigation.
  • The trial was unlikely to conclude in the near future since prosecution sanction against GST Department officials had not yet been granted.
  • Several co-accused had already been granted regular bail by the High Court, and therefore the petitioners were entitled to similar relief on the principle of parity.

 

Respondent’s Arguments

The State opposed the grant of regular bail considering the seriousness of the allegations involving corruption, GST evasion, and fraudulent Input Tax Credit.

However, the State fairly acknowledged that:

  • Investigation against the petitioners had been completed.
  • The challan had already been filed.
  • Sanction for prosecution of the concerned departmental officials was still awaited.

 

Court Order / Findings

The Punjab and Haryana High Court observed that:

  • Investigation against the petitioners stood completed.
  • The charge-sheet had already been filed.
  • Trial was likely to take considerable time because prosecution sanction against departmental officials was still pending.
  • Co-accused involved in the same case had already been granted bail.

Considering these factors, and without expressing any opinion on the merits of the allegations, the Court held that continued incarceration was not justified.

Accordingly, all the petitioners were granted regular bail, subject to furnishing appropriate bail bonds before the concerned Chief Judicial Magistrate/Duty Magistrate.

 

Important Clarification

The High Court specifically clarified that:

  • The observations made while granting bail were only for deciding the bail petitions.
  • The findings shall not be construed as an opinion on the merits of the criminal case.
  • The trial court shall independently decide the matter based on the evidence produced during trial.

 

Sections Involved

Prevention of Corruption Act, 1988

  • Section 7 – Public servant taking undue advantage
  • Section 7A – Taking undue advantage to influence a public servant
  • Section 8 – Bribery of a public servant

Indian Penal Code, 1860

  • Section 420 – Cheating
  • Section 465 – Punishment for forgery
  • Section 467 – Forgery of valuable security, will, etc.
  • Section 468 – Forgery for the purpose of cheating
  • Section 471 – Using forged document as genuine
  • Section 201 – Causing disappearance of evidence
  • Section 120-B – Criminal conspiracy

 

Link to download the order -

https://mytaxexpert.co.in/uploads/1782970953_181compressed.pdf

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