Case: Vinay Kumar Tandan v. Union of India
High Court of Chhattisgarh, Bilaspur
MCRC No. 4821 of 2025
Judgment dated: 17.07.2025
Relevant Sections: Sections 132(1)(b), 132(1)(c), 132(1)(f), 69, 16, 31, 35, 38, 39, 49 & 129 of the CGST Act, 2017; Rule 138 of the CGST Rules, 2017; Sections 483, 84, 209 & 351 of BNSS, 2023
Category of Dispute: Bail in GST prosecution (Input Tax Credit fraud)
Facts (Para 1–3)
The applicant, Vinay Kumar Tandan, authorised signatory of M/s Oviya Traders, was arrested on 28.03.2025 in connection with alleged fraudulent availment of ITC of ₹10.38 crores without actual movement of goods. The GST department alleged that ITC was availed through fake transactions and retrospective cancellation of supplier registrations, leading to cancellation of the firm’s GST registration under Rule 21. The petitioner contended that the allegations were based on mere ITC mismatches, all evidence is documentary and already with the prosecution, no custodial interrogation is pending, and that his arrest violated CBIC guidelines. He relied on Ashutosh Garg v. Union of India (2024), where bail was granted in similar facts.
Questions / Dispute (Para 3–4)
Whether the applicant accused of fraudulent ITC availment under Section 132 of the CGST Act, involving serious economic offence, is entitled to bail considering:
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the magnitude of the alleged fraud,
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the stage of investigation and pending trial, and
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the constitutional principle of liberty against prolonged detention.
Observations (Para 5–6)
The Court noted that a complaint has already been filed and the applicant has remained in custody since March 2025. While the prosecution stressed seriousness of the offence and possible tampering with evidence, the Court observed that the entire case rests on documentary evidence and further investigation may take time. The matter is triable by a Magistrate and the trial is likely to take longer. Hence, continued detention is not justified.
Judgment (Para 6–7)
The Court granted regular bail subject to strict conditions:
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Furnishing of personal bond with two local sureties.
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No adjournments when witnesses are present.
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Mandatory attendance in trial proceedings and specific stages (opening, charge framing, statement under BNSS).
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Default or misuse of bail liberty would allow the trial court to take coercive steps under Sections 269, 84, 209 and 351 of BNSS.
Table: Cases referred
| Case | Court & Year | Verdict / Ratio |
|---|---|---|
| Ashutosh Garg v. Union of India (2024) | Supreme Court | Bail was granted in GST ITC fraud case as entire evidence was documentary, trial was prolonged, and liberty could not be curtailed by indefinite custody. |
Between Fine Lines
This judgment underscores that in GST prosecutions involving alleged ITC fraud, where evidence is primarily documentary and trial is prolonged, detention cannot be indefinite. Courts are inclined to balance gravity of economic offences with the principle of liberty, provided safeguards are imposed to prevent misuse of bail.
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