Facts of the Case

The petitioner, Chandrika Singh, moved the High Court of Jharkhand at Ranchi for grant of bail in connection with Chutia P.S. Case No.125 of 2018 (G.R. No.3390 of 2018), registered under Sections 420/406/468/471/120B of the Indian Penal Code and Section 132(1)(b)/(d)/(i) of the Jharkhand GST Act, 2017. The allegation against the petitioner was that, as proprietor of M/s Annapurna Enterprises, he obtained GST registration on the basis of forged documents and, by misusing that registration, fraudulently evaded Central Tax and State Tax each amounting to ₹3,66,25,319.91. The petitioner denied entering into any rent agreement with the alleged landlord Sanjay Singh or applying for GST registration himself, contending that his brother, Rohit Kumar Singh, misused photocopies of his Aadhar Card, PAN Card and bank account details, obtained under other pretexts, to carry out the fraudulent registration. The petitioner had been in custody since 29.08.2023 and undertook to cooperate with the trial.

Issues Involved

  1. Whether the petitioner was entitled to regular bail in a prosecution alleging fraudulent GST registration and evasion of Central and State Tax under Section 132 of the Jharkhand GST Act.

Petitioner's Arguments

  • The allegations are false; the petitioner never entered into any rent agreement with Sanjay Singh nor applied for GST registration himself.
  • The petitioner's own brother, Rohit Kumar Singh, misused photocopies of the petitioner's Aadhar Card, PAN Card and bank account, obtained on his signature, to commit the fraudulent registration.
  • In a reply filed to a notice from the Income Tax Department, the alleged landlord Sanjay Singh himself denied any rent agreement with the petitioner, supporting the petitioner's version.
  • The petitioner had already been in custody since 29.08.2023 and undertook to fully cooperate with the trial of the case.

Respondent's Arguments

  • The learned Additional Public Prosecutor for the State opposed the prayer for bail.

Court Order/Findings

  • Considering the submissions of the counsels and the facts placed before it, the Court was inclined to enlarge the petitioner on bail.
  • The petitioner was directed to be released on bail on furnishing a bail bond of ₹25,000 with two sureties of the like amount, to the satisfaction of the learned J.M.F.C.-VIII, Ranchi, on condition that the petitioner cooperate with the trial of the case.

Important Clarification

  • Courts continue to grant bail in prosecutions under Section 132 of the State GST Act (a cognisable offence involving fraudulent registration and tax evasion) largely by applying standard bail parameters — length of custody, cooperation with trial, and defence version on record — rather than conducting a detailed merits assessment of the fraud allegation at the bail stage.
  • Bail was granted notwithstanding a substantial alleged combined evasion figure of roughly ₹7.3 crore (Central plus State Tax), underscoring that the quantum of alleged evasion is not by itself an automatic bar to bail once the accused has already spent a reasonable period in custody.

Sections Involved

  • Section 132(1)(b)/(d)/(i), Jharkhand GST Act, 2017 — punishes specified offences including issuance of invoices without actual supply leading to wrongful availment or utilisation of input tax credit or refund, fraudulent availment of refund, and falsification/substitution of financial records or furnishing of false information to evade tax.
  • Sections 420, 406, 468, 471 and 120B, Indian Penal Code — cheating, criminal breach of trust, forgery for the purpose of cheating, using a forged document as genuine, and criminal conspiracy, respectively, charged alongside the GST offence.

Decision – In Favour of

This being a bail application rather than an adjudication of tax liability, the order favours the accused/Petitioner on the limited question of bail — regular bail was granted subject to sureties and a cooperation condition, without any finding on the merits of the underlying GST fraud allegation.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Jharkhand at Ranchi
  • Case No.: B.A. No. 10484 of 2023
  • CNR: Not available on record
  • Coram: Justice Anil Kumar Choudhary
  • Decision Date: 22 December 2023
  • Disposal Nature: Bail granted

Link to Download the Order

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