Rajesh Agarwal v. State of Rajasthan
High Court of Judicature for Rajasthan, Bench at Jaipur
S.B. Criminal Miscellaneous Bail Application No. 5728/2025
Judgment dated: 13.06.2025
Relevant Section: Section 132(1) of CGST/SGST Act, 2017 read with Section 483 of BNSS, 2023
Category: Bail in GST offence (Fake Invoices/ITC Fraud)
Facts (Para 1–3, 8–9, 12)
The petitioner, Rajesh Agarwal, was accused of operating 44 fictitious firms registered in the names of family members and employees, issuing fake invoices, and availing fraudulent Input Tax Credit (ITC) leading to GST evasion of about ₹26 crores. He was arrested on 25.03.2025 and remained in judicial custody. The GST department completed its investigation, filed a charge sheet on 22.05.2025, and did not keep investigations pending against other firms or persons named in the complaint.
The petitioner argued that the maximum punishment under Section 132(1) of the CGST/SGST Act is five years, which is compoundable and triable by a Magistrate. With 46 witnesses yet to be examined, trial completion would take long. He relied on several precedents including Vineet Jain v. Union of India (SC, 2025) and Manoj Kumar Jain v. UOI (Raj HC, 2024) to stress on bail eligibility after filing of charge sheet and prolonged custody.
Questions before the Court
Whether the petitioner accused of ₹26 crore GST evasion through fake invoices should be granted bail despite the serious economic offence, given the long trial process, maximum punishment capped at five years, and the absence of extraordinary circumstances.
Observations (Para 7–14)
The Court acknowledged that the allegations were grave, involving dent to the state economy, but emphasized that:
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The presumption of innocence is a cornerstone of criminal jurisprudence (para 11, citing Ramesh v. State of Karnataka, 2024).
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The offence under Section 132 CGST Act carries maximum five years imprisonment with fine (para 10).
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The petitioner has been in custody since March 2025 and with 46 witnesses, the trial would be prolonged (para 12).
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In Vineet Jain (SC, 2025), the Apex Court held that in such economic offences triable by Magistrates, bail should ordinarily be granted unless extraordinary circumstances exist (para 14).
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The Public Prosecutor could not demonstrate any such extraordinary circumstance against granting bail (para 15).
Judgment (Para 15–17)
The Court held that keeping the petitioner incarcerated pending a long trial would be unjust when the maximum sentence is limited, the investigation is complete, and the case rests primarily on documentary evidence. Accordingly:
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Bail was granted subject to furnishing a personal bond of ₹1,00,000 with two sureties of ₹50,000 each.
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The petitioner was directed not to leave India without prior court permission.
Thus, bail was allowed without touching the merits of the case.
Case Law Referred (with Verdicts)
| Case | Court & Year | Verdict |
|---|---|---|
| Ratnambar Kaushik v. UOI | SC, 2022 | Bail granted; custody post charge-sheet unjustified. |
| Siya Ram Yadav v. UOI | Raj HC, 2024 | Bail allowed in similar GST evasion matter. |
| Rajesh Goyal v. UOI | Raj HC, 2025 | Bail granted after long custody. |
| Vineet Jain v. UOI | SC, 2025 | Bail granted; offences triable by Magistrate with max 5 yrs sentence, no antecedents. |
| Dhanraj Singhal v. State of Rajasthan | Raj HC, 2020 | Bail permitted in GST evasion. |
| Dev Adania v. UOI | Raj HC, 2020 | Bail granted in fake ITC case. |
| Saurabh Jindal v. UOI | Raj HC, 2022 | Bail granted in connected GST cases. |
| Sanjeev Jain v. UOI | Raj HC, 2021 | Bail allowed after charge-sheet. |
| Naresh Chandra Jajra v. UOI | SC, 2022 | Bail allowed emphasizing limited custody. |
| Ashutosh Garg v. UOI | SC, 2024 | Bail granted with similar reasoning. |
| Rajiv Jindal v. State of U.P. | SC, 2024 | Bail allowed in GST offence. |
| Krishna Damani v. State of WB | SC, 2024 | Bail granted in economic offence. |
| Manoj Kumar Jain v. UOI | Raj HC, 2024 | Bail granted noting compoundable nature and trial delay. |
Between Fine Lines
For trade and industry, this judgment reaffirms that while GST evasion allegations are treated seriously, once investigation is complete and the case is triable by Magistrates, prolonged pre-trial custody cannot be justified. Courts expect bail to be the norm unless extraordinary risks such as absconding or tampering with evidence are demonstrated.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
