Facts of the Case

The appellants were alleged to have created several fictitious and physically non-existent trading firms across Chhattisgarh, Jharkhand, Madhya Pradesh, West Bengal and Maharashtra, got them registered on the GSTN portal using forged PAN credentials, and issued fake bills to pass on fraudulent Input Tax Credit (ITC) to various traders. The DGGI, Raipur, uncovered the racket after one beneficiary, M/s Manoj Enterprises, claimed Rs.44.72 crores of ITC during July–August 2020 despite its returns showing no corresponding purchases. Appellants No.1 and 2 were arrested on 25.01.2021 from Raipur, and appellants No.3 and 4 from Siwan, Bihar, for offences under Section 132(1)(b) & (c), Central Goods and Services Tax Act, 2017. No charge sheet was filed within 60 days of judicial custody; instead, a complaint was filed by the Senior Intelligence Officer, DGGI, on 25.03.2021. Default bail under Section 167(2) CrPC was rejected by the CJM, affirmed in revision, and the resulting writ petition was dismissed by the Single Judge, giving rise to this appeal.

Issues Involved

  1. Whether the appellants were entitled to default/statutory bail under Section 167(2) CrPC on the ground that no charge sheet, only a complaint, was filed within 60 days of judicial custody.
  2. Whether a complaint filed by an authorised officer of the GST department, without a police FIR or investigation under Section 173 CrPC, satisfies the requirement of Section 167 CrPC.
  3. Whether the complaint filed under Section 132 of the CGST Act, 2017 could be treated as filed after completion of investigation despite reserving liberty to file a supplementary report.

Petitioner's Arguments

  • No charge sheet was filed within 60 days of judicial custody as mandated for default bail under Section 167(2) CrPC; only a complaint was filed on 25.03.2021.
  • Offences under Section 132 of the CGST Act, 2017 being cognizable, there was no provision to file a complaint instead of a charge sheet, and no FIR or police investigation under Section 173 CrPC had taken place.
  • Paragraph 26 of the complaint itself indicated that investigation was still under process and reserved the right to examine further witnesses and file a supplementary report, showing that investigation was not complete when the complaint was filed.

Respondent's Arguments

  • The impugned order rejecting default bail was supported, relying on the Supreme Court's decision in Directorate of Enforcement vs. Deepak Mahajan, AIR 1994 SC 1775, on the scope of investigation and arrest under special economic legislation.

Court Order / Findings

  • Relying on Deepak Mahajan, the Court held that the word 'investigation' under Section 167 CrPC is not confined to police investigation but extends to investigation by any authorised officer, including under a special Act such as the CGST Act, 2017.
  • The complaint, though not filed under Section 173 CrPC, was filed by an authorised officer within the prescribed time and, with the accompanying witness list and documents, was sufficient to establish a prima facie case under Section 132(1)(b) & (c); reservation of liberty to file a supplementary report did not render it incomplete, given the nature of an economic offence.
  • The Court held that no right to default bail under Section 167(2) CrPC accrued to the appellants, as the timely complaint satisfied the requirement of Section 167 CrPC.
  • Finding no illegality or infirmity in the learned Single Judge's judgment, the Division Bench dismissed the writ appeal at the admission stage itself, as being without substance.

Important Clarification

  • For the purpose of default bail under Section 167(2) CrPC, a complaint filed by an authorised GST officer within the statutory period is treated on par with a charge sheet, even though it is not filed under Section 173 CrPC and even where no FIR was registered.
  • Reservation of liberty in the complaint to examine further witnesses or file a supplementary report, in an economic offence, does not by itself show that investigation was incomplete at the time of filing.

Sections Involved

  • Section 132(1)(b) & (c), Central Goods and Services Tax Act, 2017 – penalises issuance of invoices without supply and wrongful availment/utilisation of ITC.
  • Section 167, Code of Criminal Procedure, 1973 – governs remand and default/statutory bail upon expiry of the prescribed investigation period.
  • Section 134, Central Goods and Services Tax Act, 2017 – requires previous sanction of the Commissioner for cognizance of offences under the Act.

Decision – In Favour of

The decision is in favour of the Department. The Chhattisgarh High Court, on a genuine consideration of the merits, dismissed the writ appeal and upheld denial of default bail, holding that the timely complaint filed by the authorised DGGI officer satisfied Section 167 CrPC.

Related Case Laws

No related case laws on this specific issue are available on this site at present.

Case Details

  • Court: High Court of Chhattisgarh, Bilaspur
  • Case No.: Writ Appeal No.348 of 2021
  • Coram: Chief Justice Arup Kumar Goswami and Justice Gautam Chourdiya
  • Date of Judgment: Reserved on 21.03.2022, delivered on 22.04.2022

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