Facts of the Case

This is a Customs Act smuggling case, not a GST matter. The petitioner, Sushil Kumar Raj @ Sonu, apprehended arrest in connection with offences under Sections 135(1)(a) and 135(1)(b) of the Customs Act, 1962, read with Sections 7, 46 and 47 of the Act and Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992. DRI officials had intercepted three persons at Gaya Railway Station on 30.06.2022 and recovered gold bullion/biscuits of foreign origin worth over Rs. 1 crore. The petitioner's name surfaced through a co-accused's confessional statement. The petitioner, owner of M/s S.K. Traders (a registered GST dealer and income tax filer), claimed he had purchased semi-finished gold jewellery worth Rs. 31,46,000 through valid tax invoices from a Tamil Nadu supplier, and that gold recovered from him (787.420 grams, worth Rs. 41,09,546) was legitimately sourced and refined, and was below the Rs. 1 crore threshold that would make the offence non-bailable under the Customs Act.

Issues Involved

  1. Whether the petitioner, who apprehended arrest, was entitled to anticipatory bail in a Customs Act smuggling investigation.
  2. Whether the value of gold attributable to the petitioner individually (rather than the combined seizure value) was relevant to determining bailability.

Petitioner's Arguments

  • He held a valid GST registration and filed regular income tax returns, evidencing a genuine jewellery trading business.
  • The gold recovered from him was purchased through documented tax invoices and had no mark of foreign origin; the DRI's claim of smuggling was based on assumption, not proof.
  • The value of gold attributable to him (Rs. 41,09,546) was below Rs. 1 crore, making the offence bailable under the Customs Act; combining seizures from three different persons with separate GST registrations to cross the threshold was impermissible.
  • Investigation was complete and a chargesheet had already been filed.

Respondent's Arguments

  • The petitioner's account of the transaction (purchase of semi-finished gold, refining, and onward transport) was a concocted story; he had failed to cooperate with repeated summons.
  • Relied on P. Chidambaram vs. Enforcement Directorate to oppose anticipatory bail.

Court Order / Findings

  • The Court considered that the chargesheet had already been filed and cognizance taken, and that the petitioner claimed a clean antecedent.
  • It directed that the petitioner, in the event of arrest or surrender within six weeks, be released on bail on a bond of Rs. 10,000 with two sureties, subject to conditions under Section 438(2) CrPC (cooperation with trial, no witness tampering, etc.).

Important Clarification

The petitioner's GST registration and tax invoices were used here only as documentary proof of a legitimate business to counter a smuggling allegation — this is a Customs Act bail order, not a ruling on any GST provision, ITC claim, or GST assessment.

Sections Involved

  • Customs Act, 1962 — Sections 7, 46, 47, 108, 135(1)(a), 135(1)(b).
  • Foreign Trade (Development and Regulation) Act, 1992 — Section 3(2).
  • Code of Criminal Procedure, 1973 — Section 438 (anticipatory bail).

Decision – In Favour of

Decided in favour of the petitioner; anticipatory bail was granted, subject to conditions, without any final finding on whether the gold was smuggled.

Case Details

  • Court: High Court of Judicature at Patna
  • Case No.: Criminal Miscellaneous No. 8751 of 2023
  • Coram: Hon'ble Mr. Justice Prabhat Kumar Singh
  • Date of Order: 20 September 2023

Link to Download the Order

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