In cases of economic offences under the CGST Act, courts should consider the nature of evidence (documentary), duration of pre-trial custody, and maximum sentence, applying the principle that bail is the rule and jail is an exception, provided there is no likelihood of evidence tampering or fleeing from justice.

AARADHNA SAWHNEY, J. (ORAL)

1. This petition for grant of bail under Section 483 BNSS, has been filed by petitioner, an accused in case bearing COMA No.247 of 2025 titled “CGST Faridabad Vs. Arun Garg” registered against him for commission of offence punishable under Section 132 of CGST Act, 2017.

2. In brief, the allegation against petitioner is that he had been running syndicate of 9 taxpayer firms (the details of which are mentioned in the complaint lodged by CGST, Faridabad, appended as Annexure P-1 along with present petition), with a criminal intention of availing and passing of fraudulent Input Tax Credit (for short – ITC) generated through these 09 firms by issuing goods-less invoices without actual supply of goods having taxable value of Rs.1,30,33,91,023/- and hence passed on fraudulent/fake ITC of Rs.23,66,02,499/- to various taxpayers within and outside the jurisdiction of CGST, Faridabad Commissionerate. In the complaint, the details of 09 taxpayers firms including the dates they were created and their relation with the present petitioner have been mentioned. It is further the case of complainant-department that all these 09 taxpayer firms in the syndicate owned and operated by present petitioner have ‘Nil’ or ‘Negligible’ inward supplies, as per their GSTRA-2A, as is apparent from the inward supply chain of M/s Sat India Insulation, one of the tax payer firm in the aforesaid syndicate of 09 taxpayer firms. On perusal of e-way bills, it was observed that there was no co-ordination between the weight of goods and the capacity of vehicles used while transportation of goods since the vehicles used were either three wheelers, as per report obtained from transport authority. Neither the quantity of goods was mentioned in the e-way bills. Further, Accountant working for the petitioner stated that he on the instructions of petitioner was generating goods-less invoices and e-way bills on daily basis from a laptop at the premises of M/s Sat India Insulation, in accordance with the slips given to him by the petitioner. In their statements recorded under Section 70 of CGST Act, 2017, various concerned persons admitted that goods-less invoices were issued by petitioner through the syndicate of 09 taxpayers firms, to various recipients taxpayers for passing fraudulent Input Tax Credit, who in turn transfer the entire amount of invoice in the accounts told by him and thus, received back the amount in cash paid against such goods-less invoices. The names of such persons have also been mentioned in the complaint. Complainant-department alleged that the documents collected by them clearly indicate that only with a view to evade the payment of tax, petitioner has created bogus firms for availing and passing of inadmissible ITC without actual supply of goods. According to complainant-department, petitioner is the mastermind, at whose instance transfers of goods-less invoices had happened and having the knowledge of all the offences, actively participated with the mens rea to defraud the State Exchequer. Thus, committed an offence under Clause (b), (c), (f) and (l) of Section 132(1) of CGST Act, 2017, punishable under Section 132 (1)(i) of CGST Act. Complaint was filed before the competent Court after completion of necessary investigation/enquiry. Petitioner, who was arrested on 28.01.2025 has been in custody since then.

3. An application for grant of bail moved by the present petitioner before the learned Additional Sessions Judge, Faridabad, was dismissed, in terms of order dated 09.04.2025. Aggrieved of the same, present petition has been filed.

4. Learned counsel for the petitioner su