Facts of the Case

Two connected bail applications were filed by Gulam Fareed and Yash Chandani, accused in complaints filed by the Directorate General of GST Intelligence (DGGI), Jaipur Zonal Unit, for offences under Section 132(1) of the CGST Act, 2017, relating to large-scale evasion of GST in clandestine purchase and supply of iron scrap without bills or e-way bills. Investigation attributed Gulam Fareed's associated firms, M/s Aravali Steels and M/s Apollo Steels, with tax evasion of Rs.13,61,76,573/-, while Yash Chandani's Yash Trading Company was linked to a broader network causing an estimated total loss of Rs.58.46 crore, with his individual exposure assessed at Rs.8,33,20,465/-.

Issues Involved

  1. Whether bail should be granted under Section 483 BNSS where the alleged GST evasion exceeds the non-bailable threshold under Section 132 of the CGST Act.
  2. What factors govern the exercise of discretion for bail in large economic offences involving tax evasion.

Petitioner's Arguments

  • The Department's investigation focused on three named masterminds, not on the present petitioners, indicating they were falsely implicated in a conspiracy they were not central to.
  • Evasion exceeding Rs.5 crore is non-bailable but the petitioners had already been in custody for months, investigation was complete, and no further custodial interrogation was needed.
  • Reliance was placed on Supreme Court precedents including Vineet Jain and several judgments on economic-offence bail parameters, urging that trial would take long and the offence was triable by a Magistrate.

Respondent's Arguments

  • The petitioners were part of a systematic network of tax evaders acting in connivance with others, with admissible statements and electronic evidence establishing evasion.
  • This was a serious white-collar crime causing huge loss to the exchequer, and coordinate bench and Supreme Court orders had denied bail in similar cases relied upon by the Department.

Court Order / Findings

  • Applying the settled factors for economic-offence bail — nature and gravity of accusation, evidence collected, flight risk, and societal impact — the Court found the Department had collected substantial electronic and documentary evidence of systematic evasion.
  • Holding that collection of tax is the lifeline of the country and its evasion denies citizens the benefit of governmental welfare and development, the Court found both petitioners were involved in a systematic network to evade tax and declined to grant bail.
  • Both bail applications under Section 483 BNSS were dismissed.

Important Clarification

  • GST evasion cases under Section 132 involving amounts running into several crores are treated as serious economic offences, attracting a stricter approach to bail than ordinary criminal matters.
  • Electronic evidence, including WhatsApp chats and admissible statements recorded during investigation, can weigh heavily against bail even where an accused claims to be only peripherally connected to the alleged mastermind network.

Sections Involved

  • Section 132(1), CGST Act, 2017 – prescribes criminal offences and punishment for tax evasion above specified thresholds, distinguishing bailable from non-bailable categories by amount.
  • Section 483, BNSS, 2023 – governs bail applications before the High Court/Sessions Court.

Decision – In Favour of

Decided in favour of the Department. Both bail applications were dismissed, the petitioners remaining in custody pending trial.

Case Details

Court: High Court of Judicature for Rajasthan, Bench at Jaipur
Case No.: S.B. Criminal Miscellaneous Bail Application No. 5378/2025 (connected with No. 5612/2025)
Coram: Hon'ble Mr. Justice Ashok Kumar Jain
Date of Order: 07.08.2025

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.