Facts of the Case

Car Pavillion Private Limited, the complainant company, sought cancellation of the regular bail granted to respondent no. 2, Vipul Natwarlal Dholakia, by the Additional Sessions Judge, Gurugram, on 10.02.2023, in FIR No. 27 dated 08.05.2021 registered under Sections 66 and 66-D of the Information Technology Act, 2000 and Section 420 IPC (later Sections 408, 467, 468, 471 and 120-B IPC were also added against various accused). The FIR alleged that unknown persons hacked or colluded to misuse the complainant-company's E-net internet banking facility with ICICI Bank to fraudulently transfer Rs.4 crore, in 16 transactions of Rs.25 lakh each, to an account of M/s Bytie Enterprises, from where the money was routed through several other accused, including respondent no. 2, who ran a gold and jewellery business (M/s Vipul Jewellers, GST No. 24AGVBD7654E2Z6). Respondent no. 2 received Rs.3,59,00,000 into his firm's IDBI bank account, which he explained as sale proceeds for gold delivered against that payment, supported by GST-compliant invoices on which GST of Rs.10,45,627 was said to have been paid and deposited.

Issues Involved

  1. Whether the trial court's grant of regular bail to respondent no. 2 suffered from any illegality warranting cancellation.
  2. Whether the GST invoices produced by respondent no. 2 to explain the transaction were relevant to the bail-cancellation analysis.

Petitioner's Arguments

  • Respondent no. 2's initial statement about the transaction was contradicted by later investigation revealing a different chain of co-accused involved in passing on the bank account details.
  • The embezzled amount had not been recovered, and respondent no. 2 had played a crucial role in disposing of it, so his continued liberty would hamper investigation and reduce chances of recovery.
  • Respondent no. 2's role had not been fully unearthed, and his bail application had earlier been dismissed by the Magistrate; he was the only link between two other co-accused, and enlargement on bail could result in his evading the law.
  • The bail granted on parity with another co-accused was not comparable, since that co-accused had spent about 18 months in custody before being granted bail, whereas respondent no. 2 got bail after only 40 days.

Respondent's Arguments

  • Respondent no. 2's involvement was verified during investigation; he ran a legitimate gold and jewellery business (M/s Vipul Jewellers) with a valid GST registration, and had received payment for gold genuinely sold, evidenced by GST invoices and GST actually paid.
  • The disclosure statements of co-accused implicating him were not admissible in evidence against him at this stage, and he had been found 'innocent' in an earlier final report relating to a related matter.
  • Investigation qua respondent no. 2 was complete and the challan/supplementary challan had already been filed; he was not the sole link the petitioner claimed him to be.
  • Personal liberty is a paramount consideration, and he had not misused the bail concession already granted to him.

Court Order / Findings

  • The High Court held that the falsity or otherwise of respondent no. 2's stand regarding the GST invoices and the gold transaction was a matter for trial, not for a bail-cancellation petition.
  • It found no illegality or perversity in the trial court's exercise of discretion in granting bail, noting the investigation against respondent no. 2 was complete and the challan filed.
  • The bail-cancellation petition was dismissed, but the Court imposed additional conditions on respondent no. 2 to ensure his appearance at trial — including regular court attendance, surrendering his passport, informing the police of his address, and furnishing an FDR of Rs.1 lakh.
  • The Court expressly clarified that its observations were not a finding on the merits of the underlying fraud allegations, which remain to be decided at trial.

Important Clarification

This case is not a GST-fraud prosecution. GST registration and invoices surfaced only as part of one accused's explanation for a large cash-linked bank transaction in a cyber-banking-fraud/cheating case under the IT Act and IPC; the Court did not examine any GST liability, evasion or offence. It should not be cited as GST-law authority — its only relevance to GST practitioners is as an example of how GST paperwork can feature as evidentiary detail in unrelated economic-offence litigation.

Sections Involved

  • Sections 66 and 66-D, Information Technology Act, 2000 — computer-related offences and cheating by personation using computer resources.
  • Sections 408, 420, 467, 468, 471 and 120-B, Indian Penal Code, 1860 — criminal breach of trust, cheating, forgery and criminal conspiracy.
  • Section 439(2), Code of Criminal Procedure, 1973 — application for cancellation of bail.

Decision – In Favour of

Decided in favour of the respondent-accused (Vipul Natwarlal Dholakia) to the extent that the bail-cancellation petition was dismissed, though with additional trial-appearance conditions imposed; the underlying fraud allegations remain undecided and will be tested at trial.

Case Details

  • Court: High Court of Punjab and Haryana at Chandigarh
  • Case No.: CRM-M-10524-2023
  • Coram: Hon'ble Mr. Justice Harsh Bunger
  • Date of Decision: 28 August 2023

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