Bail at the stage of pre-charge evidence under GST.

Shamim Akhtar v. Directorate General of GST Intelligence

High Court of Punjab and Haryana

CRM-M-33946 of 2022 (O&M)

Date of Judgement: 08 May 2023

Relevant Sections: Section 132(1)(A) & (I) of the CGST Act, 2017

Category: Bail in GST Offence involving Tax Evasion

Facts of the Case [Para 1–3]

1. The petitioner, Shamim Akhtar, sought regular bail in Complaint No. 210 of 2021 dated 27.06.2022 under Section 132(1)(A) & (I) of the CGST Act, alleging GST evasion of ₹22.30 crores through illicit sale of resin made from urea.
2. The arrest of the petitioner on 26.04.2022 was challenged as premature and in contravention of the CGST Act, since no assessment or adjudication of tax liability had taken place yet. [Para 2]
3. The case was primarily built on the statement of Manoj Kumar, who claimed to have supplied agricultural urea to M/s Saba Chemicals. However, Manoj Kumar was neither made a witness nor was any direct recovery made from the petitioner. [Para 3]

Questions in Consideration [Para 1–5]

• Whether the petitioner is entitled to regular bail in light of:
  • No direct recovery of goods or money,
  • The evidentiary value of third-party statements,
  • The quantum of punishment under the CGST Act, and
  • The stage of trial being pre-charge evidence.

Observations of the Court [Para 4–5]

1. The maximum punishment under the CGST Act is five years and the offences are triable by a Magistrate. The trial was still at the pre-charge evidence stage, indicating no immediate conclusion. [Para 5]
2. Continued incarceration of the petitioner was held to serve no useful purpose. There was no denial from the department regarding the punishment or status of the trial. [Para 5]

Judgement of the Court [Para 5–6]

• The High Court granted regular bail to the petitioner. The bail was to be furnished to the satisfaction of the concerned trial Court/Duty Magistrate.
• It was clarified that no observations made in this order shall affect the merits of the case during the trial. [Para 6]

Between Fine Lines (Summary in Simple Terms)

• The High Court granted bail to the accused since there was no recovery from him, and the trial was far from conclusion.
• The main evidence was based on a third-party statement from someone not even cited as a witness.
• The case involved alleged tax evasion via unbilled sales of resin using agricultural urea.
• Maximum punishment under the CGST Act is five years, so prolonged detention was unjustified.
• This judgement doesn’t reflect on the merits of the case and is limited to bail considerations.

Summary of Referred Cases