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Grants Bail to Javed Akhtar in GST ITC Fraud Case, Citing Undue Delay
In a significant ruling on bail jurisprudence under the , the on , granted bail to Javed Akhtar, accused of fraudulently availing on the strength of invoices issued by non-existent firms. Justice Vikram D. Chauhan, presiding over the single-judge bench, held that while criminal prosecution under the CGST Act is independent, findings in under may bear on the criminal case.
Case Background
The case arises from alleged fraudulent ITC claims during the transaction period of . Searches were conducted in , and Akhtar was arrested on . He was booked under , which attract a maximum punishment of five years. The investigation was completed, and the charge sheet was filed, but trial had not commenced. Notably, no proceedings under had been initiated against him at the time of the bail hearing.
Arguments Presented
Applicant’s Submission:
Akhtar’s counsel,
, contended that the transactions were
business dealings and that the applicant had not created any forged firms. He argued that the investigation was complete, the maximum sentence is five years, and Akhtar had been in custody for over six months. The counsel also explained a single criminal antecedent under the CGST Act and assured that the applicant would not misuse bail.
Opposition’s Submission:
The
, represented by
, opposed bail, pointing to Akhtar’s criminal history, including a case under Case Crime No. 181 of 2023. The prosecution further alleged that Akhtar had failed to surrender after being released during the COVID-19 pandemic under an order of the
.
Legal Analysis
The High Court meticulously examined the interplay between criminal prosecution and under the CGST Act. It observed that while criminal proceedings are independent, a finding in that the taxpayer has not violated the law could influence the criminal case. The court noted:
“It is not in dispute that till date proceedings under has not been initiated. The said proceedings are in the nature of in respect of alleged violation where can be issued to tax payer. Although criminal prosecution is not barred and are independent proceedings. However, where in , it is found that taxpayer has not violated any law, the same may have bearing on the criminal prosecution.”
Addressing the , the court relied on the ’s observations in Ash Mohammad v. Shiv Raj Singh (2012) and Prabhakar Tewari v. State of U.P. ( ), which caution that a history-sheeter cannot be denied bail solely on that ground unless there is evidence of tampering or intimidation. The court noted that no such material had been placed.
The court also invoked the principle that “ ,” citing Manish Sisodia v. Enforcement Directorate (2024) and underscored the . It highlighted that the trial could not conclude within a year even if commenced soon, referencing the ’s decisions in Atul Mehra v. (2026) and Vineet Jain v. (2025).
Key Observations
The court delivered several pivotal observations:
- “If the accused is otherwise found to be entitled to bail, he cannot be denied bail only on the ground of criminal history, no exceptional circumstances on the basis of have been shown to deny bail to accused.”
- “Even if case is made out, the constitutional Court while considering the bail application are required to examine whether it is reasonable to keep the accused in custody during trial and in only exceptional cases (like heinous crime) the bail can be denied.”
- “The liberty guaranteed by would cover within its protective ambit not only due procedure and fairness but also access to justice and a .”
Court’s Decision
Justice Vikram D. Chauhan allowed the bail application, directing Akhtar’s release on a and two heavy sureties of Rs. 50,000 each. The court imposed conditions including that Akhtar shall not tamper with evidence, intimidate witnesses, commit similar offences, leave India without prior permission, and must inform the court of any change in address. In case of breach, the prosecution is at liberty to seek cancellation of bail.
The judgment reinforces the principle that prolonged , especially where are pending, cannot substitute for a conviction. By holding that assessment findings may impact criminal prosecution, the court has provided a crucial safeguard for taxpayers facing dual proceedings under the GST regime.
