Case: Badal Gour v. Union of India & State of Chhattisgarh
Court: High Court of Chhattisgarh at Bilaspur
Petition: MCRC No. 7666 of 2024 (First Bail Application)
Relevant Sections: Section 132(1)(b), Section 132(1)(c), Section 132(6) of CGST Act, 2017; Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023
Category: Bail in GST fraud case (Input Tax Credit – Fake firms & tax evasion)
Date of Judgment: 14.11.2024
Facts (Para 1–3)
The applicant, Badal Gour, aged 28, was arrested in connection with Crime No. 45/FIC/GST/2024-25 for alleged offences under Sections 132(1)(b) & (c) of the CGST Act, 2017. Prosecution alleged that he was the mastermind behind six fake firms through which fraudulent Input Tax Credit (ITC) of ₹29.13 crore was availed and fake ITC of ₹34.23 crore was passed on, causing an alleged tax evasion of ₹63.37 crore. His statement was recorded under Section 70 of the CGST Act, and incriminating digital records were seized.
The defence argued that the applicant was falsely implicated, as another person, Ishan Gupta, was already being prosecuted by DGGI for the same set of firms. It was further contended that several of the firms had independent proprietors not linked to the applicant. The applicant claimed to have been misguided by Gupta and had no conscious involvement. He has been in custody since 06.08.2024 and the charge sheet has been filed.
Questions before the Court
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Whether the applicant’s continued custody was necessary despite the filing of the charge sheet.
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Whether the absence of direct incriminating recovery from the applicant justified bail in a case involving grave allegations of fake ITC and GST evasion.
Observations (Para 4–6)
The Court noted that while the allegations of tax evasion were grave, there was no incriminating recovery from the applicant’s possession. Importantly, the case materials indicated reliance on proceedings against Ishan Gupta rather than clear evidence against Gour. The applicant was in custody for over three months, the trial was likely to take considerable time, and he was identified as a transgender person, which the Court considered as a humanitarian factor.
The Court reiterated that bail should not be denied solely due to the gravity of allegations if evidentiary support is weak and prolonged pre-trial custody serves no purpose.
Judgment (Para 6–7)
The Court allowed the bail application, directing release on furnishing a personal bond of ₹1,00,000 with one solvent surety. The order will remain operative until disposal of the case.
Table of Cases Referred
In this judgment, no external precedents were expressly discussed. The Court’s reasoning was confined to facts of the case, absence of incriminating recovery, and principle of prolonged custody.
Between Fine Lines
For industry and trade, this case highlights that while fake ITC cases are taken seriously, bail can still be granted where evidence is not directly attributable to the accused and custody is prolonged. Businesses must ensure documentation trails are genuine, as individuals linked even remotely may face prosecution. Yet, courts balance gravity with fairness when evidence is lacking.
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