Anticipatory bail granted as petitioner’s regular GST compliance showed no intent to defraud and investigation cooperation was assured

Court: High Court of Punjab and Haryana at Chandigarh
Petition No.: CRM-M-15831-2025
Date of Judgment: 24.03.2025
Relevant Sections: Section 482 of BNSS, Sections 318, 319, 336, 337, 338, 340, and 61 of the Bharatiya Nyaya Sanhita (BNS), 2023, and Section 132 of the CGST Act, 2017.
Category: Anticipatory Bail – GST Fraud Allegation

Facts (Paras 1–3)

The petitioner, Sunil Kumar, proprietor of M/s Sunil Knitwears, sought anticipatory bail under Section 482 BNSS in connection with FIR No. 007 dated 31.01.2025, registered under multiple sections of BNS and Section 132 of the CGST Act, 2017.
The FIR was based on a complaint filed by a State Tax Officer, Ludhiana, alleging that the firm had forged documents and caused loss to the State Exchequer amounting to ₹3.15 crore. It was claimed that the accused had fabricated GST documents such as DRC-07 orders and manipulated records to wrongfully claim benefits.

The petitioner contended that he had been regularly filing GST Returns (GSTR-1, 2A, and 3B), all purchases were genuine and reflected in vendor returns, and no fraudulent activity had occurred. He further argued that no specific role was attributed to him beyond being the proprietor of the business.

Questions for Consideration (Para 3–4)

Whether the petitioner, maintaining regular GST compliance and expressing readiness to cooperate in investigation, could be granted anticipatory bail despite allegations of fabrication and evasion under Section 132 of the CGST Act and BNS offences.

Court’s Observations (Para 4)

The Hon’ble Court observed that the petitioner had not caused any proven loss to the State, as returns were filed on time, and all taxes were duly paid. The prosecution failed to show that any fraudulent transactions or forgery were actually committed.
The Court also noted the petitioner’s readiness to join investigation and his cooperation as per the petition’s undertaking (para 16). The principles of anticipatory bail warranted protection where the accused’s intent was bona fide and procedural compliance was evident.

Judgment (Para 5)

The Court allowed the petition and granted anticipatory bail to the petitioner, directing that he be released upon furnishing bonds to the satisfaction of the Investigating Officer.
He must:

• Join investigation within one week,

• Cooperate as required,

• Not tamper with evidence or influence witnesses, and

• Not leave India without court permission.

Failure to join the investigation would automatically cancel the bail order.

Between Fine Lines (Practical Takeaway)

This judgment underscores that mere allegations of GST fraud without substantiated proof of intent or evasion cannot justify denial of anticipatory bail. Genuine taxpayers maintaining transparent records and consistent GST filings can seek protection from arrest, provided they cooperate with authorities and show procedural diligence.

Summary of Cited Case(s)