Facts of the Case

The applicant, Sanjay Shende, was arrested in connection with Crime No. 5/GST/2023-24 registered with GST Intelligence, Raipur (Chhattisgarh), for an offence punishable under Section 132(1)(c) of the Central Goods & Services Tax Act, 2017. The prosecution's case is that the applicant was running a business styled as M/s Ciplo Trading Company, which allegedly availed unauthorized "Input Tax Credit" from various suppliers without actual supply of goods. It was further alleged that the applicant was involved in three other GST-registered firms, and that on scrutiny of GSTR-2A data he had purchased goods from firms whose GST registrations were suspended or cancelled. The unauthorized ITC availed was quantified at Rs. 10,14,70,023/-. The applicant had been in judicial custody since 11.08.2023 and filed this, his first application, seeking regular bail under Section 439 CrPC before the High Court of Chhattisgarh, Bilaspur.

Issues Involved

  1. Whether the applicant, arrested for allegedly availing fraudulent Input Tax Credit exceeding Rs. 10 crore in violation of Section 132(1)(c) of the CGST Act, 2017, was entitled to regular bail under Section 439 CrPC.
  2. Whether voluntary deposit of the remaining GST dues, absence of criminal antecedents, and the period already spent in custody justified release on bail pending trial.

Applicant's Arguments

  • The applicant had voluntarily deposited the remaining GST dues in respect of which the FIR had been lodged by the respondent authority.
  • The applicant had no criminal antecedents.
  • The applicant had been in judicial custody since 11.08.2023, and conclusion of the trial was likely to take considerable time.
  • On these grounds, regular bail was prayed for.

Respondent's Arguments

  • Counsel appearing for the non-applicant (Union of India, Central GST Commissionerate, Raipur, through DGGI) did not seriously contest the applicant's submissions and, as recorded by the Court, endorsed the same position placed by the applicant's counsel.

Court Order/Findings

  • The Court, after hearing counsel for both parties and perusing the case diary, took into consideration that the applicant had no criminal antecedents, had voluntarily deposited the remaining GST dues concerning the FIR, and had already been in custody since 11.08.2023.
  • The Court held that the applicant was entitled to be released on regular bail.
  • The applicant was directed to be released on personal bond with two sureties, subject to conditions: no adjournments sought when witnesses are present; regular presence before the trial court, in person or through counsel; consequences under Sections 82 and 174-A IPC/CrPC for non-appearance on proclamation; and mandatory personal presence at the opening of the case, framing of charge, and recording of statement under Section 313 CrPC.
  • The trial court was expected to make an earnest endeavour to conclude the trial expeditiously.

Important Clarification

  • Voluntary deposit of the outstanding GST dues forming the basis of the FIR, coupled with absence of criminal antecedents and a substantial period already undergone in custody, are relevant factors weighing in favour of grant of regular bail in prosecutions under Section 132(1)(c) of the CGST Act, 2017.
  • Bail granted in such economic offence cases is typically conditional, with strict compliance obligations designed to prevent misuse of liberty and to ensure the applicant's presence throughout trial.

Sections Involved

  • Section 132(1)(c), Central Goods & Services Tax Act, 2017 — penalises availing of input tax credit using invoices without actual supply of goods or services.
  • Section 439, Code of Criminal Procedure, 1973 — confers power on the High Court/Sessions Court to grant bail.
  • Sections 82 and 174-A, Indian Penal Code, 1860 — deal with proclamation for absconding accused and consequences of non-appearance.
  • Section 313, Code of Criminal Procedure, 1973 — pertains to recording of the accused's statement during trial.

Decision – In Favour of

Regular bail was granted to the applicant, subject to furnishing a personal bond with two sureties and compliance with the conditions imposed by the Court. The decision is thus in favour of the applicant/accused on the question of bail, without any adjudication on the merits of the underlying GST allegations, which remain to be examined at trial.

Related Case Laws

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

Case Details

  • Court: High Court of Chhattisgarh, Bilaspur
  • Case No.: MCRC No. 6434 of 2023
  • Parties: Sanjay Shende (Applicant) vs Union of India, Central GST Commissionerate, Raipur, through DGGI (Non-Applicant)
  • Coram: Hon'ble Mr. Ramesh Sinha, Chief Justice
  • Order Date: 08.11.2023
  • Counsel for Applicant: Mr. B.P. Sharma, Advocate
  • Counsel for Non-Applicant: Mr. Maneesh Sharma, Advocate

Link to Download the Order

Download the full judgment (PDF)

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