The court reaffirmed that bail in economic offences must adhere to legal classifications; deposit of funds does not alter the non-bailable nature of offences exceeding specified monetary thresholds.

ORDER :

Praveer Bhatnagar, J.

1. Union of India through the Intelligence Officer, Goods And Services Tax, Intelligence Department has submitted an application for cancelling the bail granted to the respondent- Arun Jindal vide impugned order dated 11.03.2025, whereby the respondent was enlarged on bail for the offences under Sections 132 (1) (a) (f) (h) and (1) of Central Goods and Service Tax Act, 2017 (hereinafter referred to as ‘the CGST Act’).

2. It is contended by learned counsel for the petitioner that the said order suffers from patent illegality and perversity as in para 22 of the impugned order, the trial court has observed that under Section 132 (1) (ii) read with Section 132 (4) of the CGST Act, the offences are compoundable and bailable and if the respondent wish to deposit the 50% of the amount quantified as Rs.9,39,79,589/- then the offence would come within the purview of Section 138 of the CGST Act, which is compoundable.

3. It is contended that the analogy drawn by learned Trial Court, while granting bail to the respondent is contrary to terms of Section 132 read with Section 138 of the CGST Act.

4. It is also contended that the allegations levelled against the respondent No.2 are grave. It is alleged against the respondent that he clandestinely supplied goods weighing 1,49,17,395 KG of Ingots without issuance of any invoices with the aid of one Manoj Vijay and his partners, having a taxable value of 52,21,08,825/-, thereby, evading the GST of Rs. 9,39,79,589/-, thus causing substantial loss to the public exchequer.

5. It is also contended that the grant of bail to the respondent, on the condition of depositing Rs. 5 Crore before the trial court is also against the law. The Hon’ble Apex Court in a much recent case of Gajanan Dattaray Gore Vs. State of Maharashtra , 2025 INSC 913, has held that no court shall grant regular or anticipatory bail on the basis of any undertaking or conditional deposit offered by the accused and bail must be decided strictly on merits in accordance with law.

6. Thus, the grant of regular bail to the respondent and giving him direction to deposit a particular amount is per se illegal. The trial Court, without going into the merits of the case, granted bail to the respondent. The respondent by his action has transgressed and violated the law and caused a massive loss to the public exchequer in the tune of Rs. 9,39,79,589/-, which may further escalate, thus committed the offence under Section 132(1)(a)(f) (h) and (1) of the CGST Act.

7. Learned counsel for the petitioner has also referred to the judgment of Mahipal Vs. Rajesh Kumar alias Polia & Anr., (2020) 2 SCC 118 , wherein, at para 12, the Court held that, before granting bail, numerous factors are to be taken into consideration, including the severity of the punishment and a prima facie view of the accused's involvement. It is also contended that in the matter of YS Jagmohan Reddy Vs. Central Bureau of Investigation , (2013) 7 SCC 439 , it was held that economic offences constitute a class apart and require a different approach in matters of bail and include deep-rooted conspiracies involving huge loss of public funds. It was also observed in the said judgment that these offences need to be viewed seriously and considered as grave offences affecting the economic condition of the country as a whole and thereby posing a serious threat to the financial health of the country.

8. It is also argued that the Coordinate Bench has already dismissed the bail application of the co-accused Naveen Yadav and Manoj Vijay. The other two co-accused Manoj Vijay and Naveen Yadav facilitated the