Facts of the Case

The Directorate General of GST Intelligence (DGGI) filed a petition before the Delhi High Court seeking to set aside the order dated 30.06.2022 passed by the Sessions Court granting anticipatory bail to Vikas Garg and other respondents.

According to the Department, approximately ₹44 crore was recoverable as tax from the respondents on account of the alleged wrongful Input Tax Credit (ITC). During the hearing, the respondents submitted that they had already deposited ₹5 crore, equivalent to approximately 12.5% of the alleged wrongful ITC claim.

The Department further contended that while granting anticipatory bail, no specific condition had been imposed requiring the respondents to cooperate with the investigation, and consequently, they were not joining the investigation as required.

Issues Involved

  1. Whether the anticipatory bail granted by the Sessions Court should be quashed.
  2. Whether the respondents should be directed to cooperate with the GST investigation.
  3. Whether appropriate safeguards were required to ensure an effective investigation without cancelling anticipatory bail.

Petitioner's Arguments

  • The Directorate General of GST Intelligence argued that tax amounting to nearly ₹44 crore was recoverable from the respondents.
  • It was submitted that the Sessions Court granted anticipatory bail without imposing any condition requiring the respondents to participate in the investigation.
  • The Department contended that the respondents were not cooperating with the investigating authorities, thereby affecting the investigation.

Respondents' Arguments

  • The respondents submitted that they had already deposited ₹5 crore, representing approximately 12.5% of the alleged wrongful ITC amount.
  • They fairly stated before the High Court that they had no objection to joining the investigation whenever directed by the Intelligence Officer of the Department.

Court Order / Findings

The Delhi High Court did not interfere with the order granting anticipatory bail.

Instead, the Court directed the respondents to:

  • Join the investigation whenever called upon by the Intelligence Officer of the Department.
  • Cooperate fully with the investigating agency.
  • Refrain from tampering with documents.
  • Not intimidate or influence witnesses in any manner.

In view of these directions, the petition filed by the Department was disposed of, along with the pending application.

Important Clarification

  • Grant of anticipatory bail does not exempt an accused from cooperating with the investigation.
  • The investigating agency is entitled to require the accused to appear during investigation even after grant of anticipatory bail.
  • Courts may impose additional safeguards to ensure a fair investigation instead of cancelling anticipatory bail.
  • Mere absence of conditions in the original bail order can be addressed by issuing suitable directions without disturbing the protection already granted.

Sections Involved

  • Section 69 – Power to Arrest under the CGST Act, 2017.
  • Section 132 – Punishment for Certain GST Offences under the CGST Act, 2017.

Link to Download the Order

https://mytaxexpert.co.in/uploads/1785321725_2224compressed.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.