Facts of the Case

The petitioner, Kawaljot Singh, sought regular bail in a complaint (No. COMA/15650/2021) filed by the Superintendent (Anti-Evasion), Central Goods & Services Tax, against Gurbax Lal @ Happy Nagpal and others, under Section 132 of the CGST Act, 2017, corresponding provisions of the Punjab GST Act, 2017, and Section 20 of the IGST Act, 2017. The complaint alleged offences involving amounts variously stated as Rs. 3,81,00,000/- (as per the petitioner) or up to Rs. 13 crore (as per the department) attributable to the petitioner. This was the petitioner's second bail application; he had already been in custody for 1 year, 6 months and 16 days, and the complaint was still at the summoning stage. Two other accused had already secured default bail, and one co-accused, Harsimranjot Singh Bambhi, said to be at parity with the petitioner, had already been granted regular bail by the same Court.

Issues Involved

  1. Whether the petitioner was entitled to regular bail given the length of pre-trial custody, the stage of proceedings, and parity with a co-accused already granted bail.

Petitioner's Arguments

  • The petitioner was in custody for over 1.5 years, the case was still at the summoning stage, and he was on parity with co-accused Harsimranjot Singh Bambhi, who had already been granted regular bail.

Respondent's Arguments

  • While parity with the co-accused was not disputed, the department contested the quantum of the petitioner's alleged involvement, asserting the case involved a total of Rs. 13 crore, not Rs. 3.81 crore as claimed by the petitioner.

Court Order / Findings

  • Noting that even where the amount involved exceeds Rs. 5 crore, the maximum sentence under Section 132 of the CGST Act is 5 years, and the petitioner had already spent more than 1.5 years in custody with the complaint still at the summoning stage.
  • Considering parity with co-accused Harsimranjot Singh Bambhi (already granted bail) and the other two accused (already granted default bail), the Court found this a fit case for regular bail.
  • Bail was granted subject to furnishing bail bonds/surety, with the Court expressly clarifying that its observations were not to be treated as an expression of opinion on the merits of the case.

Important Clarification

This order decides only the bail question — the quantum of tax evasion attributed to the petitioner (Rs. 3.81 crore vs. Rs. 13 crore) remains a disputed and unresolved question for trial, and the order should not be read as any finding on the merits of the alleged GST fraud.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — Section 132
  • Punjab Goods and Services Tax Act, 2017 — corresponding provisions
  • Integrated Goods and Services Tax Act, 2017 — Section 20
  • Code of Criminal Procedure, 1973 — Section 439

Decision – In Favour of

Decided in favour of the Petitioner/Accused on the bail application only; disposed of without any decision on the merits of the GST evasion allegations.

Case Details

Court: High Court of Punjab and Haryana at Chandigarh
Case No.: CRM-M-16871-2023 (O&M)
Coram: Hon'ble Mr. Justice Jasgurpreet Singh Puri
Date of Decision: 24 April 2023

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