Regular Bail was not granted where tax evasion was of huge quantum.

Case Title: Vikas Goel v. Central Goods & Services Tax Commissionerate, Gurugram

Court: High Court of Punjab and Haryana

Petition Number: CRM No. M-45649 of 2018 (O&M)

Category of Dispute: Bail in GST Evasion Case

Date of Judgment: 13 December 2018

Relevant Section(s): Section 69 of the CGST Act, 2017; Section 439 of Cr.P.C.

Takeaway: Bogus billing and GST evasion can justify arrest under Section 69 CGST Act without pre-assessment.

Facts of the Case [¶1, ¶4]

• Petitioners Vikas Goel and Raju Singh were arrested by the DGGI, Gurugram under Section 69 of the CGST Act for alleged involvement in GST evasion exceeding ₹80 crores through fake billing.
• It was discovered during investigation that certain firms like M/s Sriram Industries and M/s MICA Industries were being used for paper transactions without actual movement of goods.
• The premises were found non-functional for years, and documents revealed evasion of CGST.
• Statements were recorded from key individuals including transporters and proprietors that corroborated the findings.

Question(s) in Consideration [¶1, ¶3]

• Whether the petitioners are entitled to regular bail under Section 439 Cr.P.C. when arrested under Section 69 of CGST Act in a tax evasion case, without a formal assessment having been made?

Observation of Court [¶5–¶6]

• The court held that the gravity of the offence and the substantial amount involved (over ₹80 crores) justified arrest under Section 69 of the CGST Act.
• It clarified that assessment proceedings are distinct and not a prerequisite for arrest under the CGST Act.
• The complaint had already been filed, and arrest was based on prima facie material including documents and statements, warranting custody at this stage.

Judgment of the Court [¶7]

• The Court found no merit in the bail petition and dismissed it.
• It noted that the decision does not reflect upon the merits of the ongoing trial.

Between Fine Lines

• Arrest under Section 69 of the CGST Act does not require prior assessment.
• Gravity of economic offence and evasion amount influences bail decision.
• Paper transactions without movement of goods constitute valid grounds for arrest.
• Assessment and prosecution can proceed independently.
• Courts may deny bail in serious tax evasion cases even if a complaint is already filed.

Summary of Referred Cases