Bail Granted in ITC Fraud Case Due to Medical Grounds and Completed Investigation

Issue

Whether a petitioner accused of Input Tax Credit (ITC) fraud is entitled to regular bail after six months of custody, considering the investigation is complete and the petitioner suffers from serious medical ailments.

Facts

Nature of Offence: The petitioner was implicated in an ITC fraud case under Section 132 of the CGST/Punjab GST Act.
Custody Period: The petitioner had been in judicial custody for over six months at the time of the hearing.
Investigation Status: The investigation was fully complete, and nothing remained to be recovered from the petitioner’s possession.
Medical Condition: The petitioner was suffering from a serious ailment. During the custody period, his condition required him to be shifted to a hospital, and he had previously been granted interim bail on medical grounds.
Trial Context: The offence is triable by a Court of Judicial Magistrate, carrying a maximum punishment of imprisonment of up to five years. It was noted that the trial was not likely to conclude in the near future.

Decision

No Purpose in Detention: The court held that since the investigation was complete and no recoveries were pending, keeping the petitioner in judicial lock-up would serve no useful purpose.
Flight/Tampering Risk: There was no material on record to suggest that the petitioner, if released, would tamper with evidence, influence witnesses, or fail to cooperate with the trial.
Medical and Legal Grounds: Considering the maximum sentence (5 years), the length of custody already undergone, and the petitioner’s serious medical condition, the court deemed it a fit case for bail.
Verdict: The petitioner was granted the benefit of bail. [In favour of assessee]

Key Takeaways

Bail Post-Investigation: In GST offences, even those involving fraud, the completion of the investigation (filing of the charge sheet/complaint) significantly strengthens the case for bail, as the need for custodial interrogation ceases.
Medical Grounds: A verified history of serious ailments and hospitalization during custody is a compelling factor for granting bail in economic offence cases.
Proportionality: Courts consider the maximum possible sentence (e.g., 5 years) versus the time already spent in pre-trial custody to prevent punitive detention before conviction.

HIGH COURT OF PUNJAB AND HARYANA

Manmohan Singh

State (Directorate General of GST Intelligence), Chandigarh^*

SURYA PARTAP SINGH, J.

Criminal Misc. No. M-38179 of 2025

DECEMBER 15, 2025

Anil Mehta and Ms. Livleen Brar, Advs. for the Petitioner. Rajesh Sethi, Senior Standing Counsel and Vaibhav Mittal, Additional Public Prosecutor for the Respondent.

ORDER

Surya Partap Singh, J. Alleging the commission of offence punishable under Section 132(1)(b)&(c) read with Sections 132(1(i) and 135(5) of the Central Goods and Services Tax Act, 2017, hereinafter being referred to as “CGST Act”, the case No. INT/7-2005-Group-E O/o ADG-DGGI-ZU-Chandigarh has been registered, wherein the petitioner has been implicated as an accused and therefore, taken into custody on 28.05.2025. The petitioner is seeking for the benefit of bail with regard to above mentioned arrest.

2. In nut-shell, the facts projected by the respondent/complainant are that on 26.05.2025 two searches, by the Investigating Agency of the respondent, were conducted, almost simultaneously. The first search was from 5.45 P.M. to 11.45 P.M. at the residential premises of the petitioner and the second one from 5.43 P.M. on 26.05.2025 till 01.50 A.M. on 28.05.2025 at the premises of the company of the petitioner ‘M/s PMI Smelting Private Limited’, GST No. 03AANCP1807A1ZZ. As per complainant, during the former search, one mobile phone and certain documents kept in Folders No.1 and 2, respectively, were seized, while in the second search only the personal mobile phone of the petitioner was seized.

3. The pith and substance of the allegations, as contained in the complaint, is that an intelligence was gathered to the effect that ‘M/s PMI Smelting Private Limited’ having registered office at 536/210, Industrial Area-C, Dhandari Kalan, Ludhiana, having GSTIN 03AANCP1807A1ZZ, was engaged in availing Input Tax Credit, hereinafter being referred to as “ITC”, and has thereby caused loss to the State Exchequer to the tune of Rs. 30.21 Crores (approx.) on the basis of invoices taken from ‘M/s P.C. Techno Solutions’, without actual transaction of goods. Said ‘M/s P.C. Techno Solutions’ was further taking ITC on the basis of invoices issued from firms ‘M/s Maa Vaishno Enterprises’ and ‘M/s S.S.Enterprises’. ‘M/s S.S. Enterprises’ was taking ITC on the basis of invoices issued by ‘M/s Goyal Trading Company’ and ‘M/s Jha and Jha Enterprises’. All said firms forming a chain were found having no office at the registered addresses which means that in fact said firms were not existing and were being used for creating fake bills to get ITC. Accordingly, searches were conducted at the residential addresses of Manmohan Singh and Baldeep Singh, Directors of ‘M/s PMI Smelting Private Limited’, in Plot No. 132-A, Model Town Extension, Ludhiana, their premises having Plot No. 501, Industrial Area B, Gill Road, Opposite Meshi Dhaba, Ludhiana and at their registered office in Industrial Area-C, Dhandari Kalan, Ludhiana. During search in the office in Industrial Area B, Gill Road, Ludhiana, it transpired that GST returns of both ‘M/s PMI Smelting Private Limited’ and ‘M/s P.C. Techno Solutions’ were being filed from the same premises and Broadband connection used for filing the same was also in the name of applicant Manmohan Singh with contact details of his son Baldeep Singh. Several cheque books and stamps were found lying in the premises. It also transpired that vehicles used for alleged transportation of articles were having registration numbers which had been assigned to motor cars, scooters or three wheelers, whereas the above said vehicles were neither designed nor capable of transporting goods in commercial quantity. Thereby, it was clear that fake invoices were being used by the applicant and his son Baldeep Singh for taking ITC and causing loss to the State Exchequer. Upon calculating, the amount came to around Rs. 30.21 Crores.

4. The present petition has been filed, seeking for the benefit of bail by the petitioner primarily, on the following grounds:-

(i)

that the petitioner is innocent having no nexus, whatsoever, with the commission of crime, and that a false story has been created by the complainant/respondent to prosecute the petitioner;

(ii)

that the necessary instructions/guidelines, to be followed at the time of search, were not followed by the search party either at the time of search, at the residential premises of the petitioner or at the time of search in the business premises of the petitioner;

(iii)

that at the time of search no incriminating material showing involvement of the petitioner in any crime was collected;

(iv)

that the panchnama with regard to seizure of alleged evidence, such as cheque book etc. at the business premises of the petitioner shows that the search proceedings were conducted in the presence of so called Manager, namely Inderpal Singh. According to petitioner, Inderpal Singh has never been an employee of the petitioner and thus, the very basis of the prosecution of the petitioner, i.e. search proceedings itself, stands vitiated;

(v)

that the premises being plot No. 501, Industrial Area-B, Gill Road, opposite Meshi Dhabha, Ludhiana, Punjab, does not belong to the petitioner and in fact an entirely separate entity is operating its business activities from the aforesaid address, having no connection or nexus, whatsoever, with the petitioner;

(vi)

that before conducting raid, neither any show cause notice was served upon the petitioner nor he was given an opportunity of being heard or explain his position and straightway the prosecution has been initiated;

(vii)

that the petitioner was detained by the officials of the respondent in the evening on 26.05.2025 without showing his arrest and that the arrest of the petitioner was shown on 28.05.2025 and he was produced before the Court of learned Area Judicial Magistrate at about 01.50 P.M. on 28.05.2025, Thus, the over all detention period of the petitioner comes out to be more than 24 hours;

(viii)

that the grounds of detention were not served upon the petitioner as per requirement under the law;

(ix)

that the petitioner is suffering from serious ailment, and that during the course of his judicial custody also he suffered sever stroke and had to be shifted to the hospital in emergency condition; and

(x)

that the entire evidence has already been collected by the Investigating Agency and the investigation is already over and the complaint has been filed in the Court and thus, the detention of petitioner in the judicial lock-up will not serve any purpose.

5. The above mentioned grounds taken by the petitioner for the purpose of bail have been controverted by the respondent, by filing a written reply wherein the prayer of the petitioner for the benefit of bail, has been opposed and each and every plea taken by the petitioner has been specifically and categorically denied. In its reply, the respondent has reiterated its allegations contained in the complaint and alleged that the petitioner had been adopting fraudulent ways and means to draw undue advantage by issuing goods-less invoices, creating fake firms and then claiming Inward Tax Credit (ITC). While claiming that no violation of any rule or regulation was committed, either at the time of search or at the time of arrest of the petitioner or at the time of producing him before the Court. It has been claimed by the respondent that the grounds taken by the petitioner in the present petition are false and the petitioner is not entitled for the benefit of bail.

6. In its reply, the respondent has specifically and categorically denied this allegation of the petitioner that the petitioner was detained for a period of more than 24 hours or that the search proceedings were conducted in an illegal manner. The respondent has also categorically denied this fact that the grounds of arrest were not served upon the petitioner.

7. With regard to allegations of petitioner related to his medical condition, the respondent has alleged that on this ground also the petitioner is not entitled for the benefit of bail as adequate medical assistance was provided to the petitioner without any delay, when he was in custody and fell ill. While claiming that no ground for grant of bail is made out, the respondent has sought the dismissal of instant petition.

8. Heard.

9. It has been contended by learned counsel for the petitioner that to save a person from being falsely implicated in a criminal case several safeguards have been provided by the legislature under the statute and the same have been further developed in the judicial precedents, but the instant case is an example of blatant violation and breach of all the above mentioned norms and the statutory provisions. According to learned counsel for the petitioner, one of the most strange fact to be taken into consideration is that the entire prosecution of the petitioner is founded on the alleged search, conducted in the alleged business premises of the petitioner, and that the above mentioned search itself is a doubtful proceeding and also a proceeding conducted in violation of law.

10. With regard to above, the learned counsel for the petitioner has contended that firstly, the premises where the search was conducted did not belong to the petitioner, secondly the person who was allegedly present on the spot as Manager of the petitioner’s company, was never employed by the petitioner and therefore, the proceedings with regard to collection of evidence on the spot in itself stands vitiated.

11. The learned counsel for the petitioner has also contended that in the present case, the officials of the respondent have violated the fundamental rights guaranteed to the petitioner, being citizen of India, i.e. producing him before the Court within 24 hours of his arrest. With regard to above, the learned counsel for the petitioner has contended that firstly, the petitioner was illegally detained since evening on 26.05.2025 till 01.50 A.M. on 28.05.2025 and thereafter, by creating the false documents his arrest was shown at 01.50 A.M. on 28.05.2025 and he was produced before the learned Area Judicial Magistrate. As per learned counsel for the petitioner the above mentioned fact situation shows that the overall detention period of the petitioner was more than 24 hours.

12. It has also been contended by learned counsel for the petitioner that the petitioner was subjected to above mentioned violation and inhuman treatment despite the fact that the petitioner had been suffering from serious ailments and even in judicial custody on one occasion he had to be admitted to a hospital in emergency condition.

13. The learned counsel for the petitioner has further contended that another violation on the part of respondent was that the grounds of arrest were not properly served upon the petitioner, and that otherwise also, there was violation with regard to arrest of the petitioner as before search and prosecution, the petitioner was not served with any notice under the CGST Act and thus, the opportunity of being heard or defending himself has been denied to him.

14. According to learned counsel for the petitioner, otherwise also, the investigation of the present case is complete, and that the offence is triable by the Court of Judicial Magistrate and the maximum punishment prescribed for the offence is imprisonment upto five years. The learned counsel for the petitioner are further contended that nothing is left to be recovered from the possession of petitioner, and that detention of petitioner in judicial lock-up is not likely to serve any purpose, and therefore, the petitioner is entitled to the benefit of bail.

15. It has also been contended by learned counsel for the petitioner that by virtue of order dated 24.07.2025, on medical grounds, the interim bail has been accorded to the petitioner, and that there is no allegation against the petitioner that during the above mentioned period the benefit of interim bail according to the petitioner has been misused by the petitioner in any manner, whatsoever.

16. In support of his arguments, the learned counsel for the petitioner has referred to the principles of law laid down by the Hon’ble Supreme Court of India in the following cases:-

•

Directorate of Enforcement v. Subhash Sharma (2025) SCC Online SC 240;

•

Anvar P.V. v. P.K. Basheer (2014) 10 SCC 473 ;

•

Manish Kumar v. DGGSIT (Punjab & Haryana)/Criminal Misc. No. M- 8675 of 2025, decided on 28.07.2025.

17. The learned counsel for the respondent has controverted the above mentioned arguments. It has been contended by learned counsel for the respondent that the instant case is a case wherein all types of illegal tactics have been adopted by the petitioner, firstly, to defraud the State Exchequer and secondly, to obtain the benefit of bail. According to learned counsel for the respondent, there is ample positive evidence showing the involvement of the petitioner in the commission crime under Section 132(1) (b)&(c) read with Sections 132(1(i) and 135(5) of the CGST Act, and that the falsity of the stand of the petitioner can be seen from the fact that the petitioner has gone to the extent that he has denied this fact that the premises, where the raid was conducted, belongs to him and also that the person who was present and looking after the above mentioned premises was an employee of the petitioner. According to learned counsel for the respondent, even the story projected by the petitioner with regard to his illness is not supported with any medical evidence as despite repeated demands, the petitioner failed to provide any document showing that he was having any serious ailment, which cannot be treated in the Jail Dispensary or the Government Hospitals.

18. The learned counsel for the respondent has further contended that the allegations against the petitioner are that he caused loss to the tune of Rs. 32.01 crores to the State exchequer by creating goods-less invoices and then claiming ‘Input Tax Credit’. According to learned counsel for the respondent, the offence committed by the petitioner has far reaching impact on the financial health of the country, and that the Hon’ble Supreme Court of India has repeatedly observed that the economic offences should be dealt with iron hands. While claiming that the petitioner is not even entitled for bail on the ground of delay in trial, resulting into violation of right of speedy trial, it has been contended by learned counsel for the respondent that the petitioner is not entitled for the benefit of bail.

19. In support of his arguments, the learned counsel for the respondent has placed reliance upon the principles of law laid down by the the Hon’ble Supreme Court of India in the following cases:-

•CBI

v. V. Vijay Sai Reddy (2013) 7 SCC 452 ;

•Nimmagadda

Prasad v. CBI (2013) 7 SCC 466 ;

•Gautam

Kundu v. Manoj Kumar, Asstt. Director (SC)/(2015) 16 SCC 1 ;

•

State of Bihar v. Amit Kumar alias Bacha Rai (2017)13 SCC 751 ;

•

Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439 ;

•

Adri Dharan Das v. State of West Bengal, (2005) 4 SCC 303 ; And

•

Radhika Agarwal v. UOI GSTL 225 (SC)/(2025)6 SCC 545 ; UOI v. Padam Narain Aggarwal 2008 (231) E.L.T. 397 (SC)/(2008)13 SCC 305

20. I have given the due consideration to the facts and circumstances to get the present case and the arguments addressed by the learned counsel for the parties.

21. In the present case, it is relevant to note here that with regard to right of bail, the Hon’ble Supreme Court of India in the case of Vineet Jain v. UOI GSTL 129 (SC)/Criminal Appeal No. 2269 of 2025, decided on 28.04.2025, has made the following observations:-

“The offences alleged against the appellant are under Clauses (c), (f) and (h) of Section 132(1) of the Central Goods and Services Tax Act, 2017. The maximum sentence is of 5 years with fine. A charge-sheet has been filed. The appellant is in custody for a period of almost 7 months. The case is triable by a Court of a Judicial Magistrate. The sentence is limited and in any case, the prosecution is based on documentary evidence. There are no antecedents

We are surprised to note that in a case like this, the appellant has been denied the benefit of bail at all levels, including the High Court and ultimately, he was forced to approach this Court. These are the cases where in normal course, before the Trial Courts, the accused should get bail unless there are some extra ordinary circumstances.

By setting aside the impugned order dated 24th January, 2025 of the High Court of Judicature for Rajasthan, Bench at Jaipur, we grant bail to the appellant. The appellant shall be immediately produced before the Trial Court and the Trial Court shall enlarge him on bail on appropriate terms and conditions till the conclusion of the trial.”

22. In addition to above, it is also relevant to mention here that the Hon’ble Supreme Court of India in the case of Radhika Agarwal (supra) has propounded that “the arrest must proceed on the belief supported by reasons relying on material that the conditions specified in Section 132(5) are satisfied, and not on suspicion alone. An arrest cannot be made to merely investigate whether the conditions are being met. The arrest is to be made on the formulation of the opinion by the Commissioner, which is to be duly recorded in the reasons to believe. The reasons to believe must be based on the evidence establishing to the satisfaction of the Commissioner that the requirements of sub-section (5) to Section 132 of the GST Act are met’.

23. It has also been observed by the Hon’ble Supreme Court of India in the above mentioned case that “the figures with regard to the tax demand and the tax collected would, in fact, indicate some force in the petitioners’ submission that the assessees are compelled to pay tax as a condition for not being arrested. Sub-section (5) to Section 74 of the GST Acts gives an option to the assessee and does not confer any right on the tax authorities to compel or extract tax by threatening arrest. This would be unacceptable and violative of the rule of law’.

24. In the case of Sanjay Chandra v. CBI (2012) 1 SCC 40, the Hon’ble Supreme Court of India has ruled that the benefit of bail cannot be denied merely in view of severity of the offence, and that the Court ought to be conscious of the right to speedy trial bestowed on the account by virtue of Article 21 of the Constitution of India.

25. This Court in the case of Gurcharan Singh v. State AIR 1978 SC 179 observed that ‘two paramount considerations, while considering petition for grant of bail in non-bailable offence, apart from the seriousness of the offence, are the likelihood of the accused fleeing from justice, and tampering with the prosecution witnesses. Both of them relate to ensure of the fair trial of the case.

26. With regard to right of bail to an accused, the Hon’ble Supreme Court of India in the case of Directorate of Enforcement v. Subhash Sharma 2025 SCC Online SC 240 has ruled that “once a Court, while dealing with a bail application, finds that the fundamental rights of the accused under Articles 21 and 22 of the Constitution of India have been violated while arresting the accused or after arresting him, it is the duty of the Court dealing with the bail application to release the accused on bail. The reason is that the arrest in such cases stands vitiated. It is the duty of every Court to uphold fundamental rights guaranteed under Articles 21 and 22 of the Constitution.”

27. The Hon’ble Supreme Court of India in the case of State of Kerala v. Raneef (2011) 1 SCC 784 has observed that the primary purposes of bail in a criminal case are to release the accused of imprisonment, to release the State of the burden of keeping him, pending trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction, to ensure that he will submit to the jurisdiction of the Court and being attendance thereon whenever his presence is required. 28. In the case of Sanjay Chandra (supra), the Hon’ble Supreme Court of India has observed that it is not in the interest of justice that accused should be in jail for any indefinite period. According to Hon’ble Apex Court, even if the offence is serious in terms of huge loss to the State exchequer, that, by itself, should not deter the Court from enlarging the appellant on bail, when there is no serious contention of the respondent that the accused, if released on bail, would interfere with the trial or tamper with the evidence.

29. Further still, recently, in Ashutosh Garg v. UOI GST 572 (SC)/Special Leave to Appeal (Crl.) No(s).8740/2024, decided on 26.07.2024, the Hon’ble Supreme Court has granted bail in a matter where the accused defrauded the State exchequer of Rs. 1032 crores as ‘Input Tax Credit’ by creating 294 fake firms, citing long custody of 09 months as well as the fact that maximum punishment in the offence under Section 132 CGST Act is 05 years.

30. In the case of Ratnambar Kaushik v. UOI [2023] 95 GST 548/68 GSTL 233 (SC)/(2023) 2 SCC 671, the Hon’ble Supreme Court of India deliberated upon the documentary and electronic nature of evidence as well as the prolonged trial in the matters pertaining to tax evasion under the CGST Act. In the above mentioned case, the accused had undergone imprisonment for a period of about 4 months, and in the above said circumstances, the Hon’ble Supreme Court of India opined as follows:

“In considering the application for bail, it is noted that the petitioner was arrested on 21.07.2022 and while in custody, the investigation has been completed and the charge sheet has been filed. Even if it is taken note that the alleged evasion of tax by the petitioner is to the extent as provided under Section 132(1)(l)(i), the punishment provided is, imprisonment which may extend to 5 years and fine. The petitioner has already undergone incarceration for more than four months and completion of trial, in any event, would take some time.

Needless to mention that the petitioner if released on bail, is required to adhere to the conditions to be imposed and diligently participate in the trial. Further, in a case of the present nature, the evidence to be tendered by the respondent would essentially be documentary and electronic. The ocular evidence will be through official witnesses, due to which there can be no apprehension of tampering, intimidating or influencing. Therefore, keeping all these aspects in perspective, in the facts and circumstances of the present case, we find it proper to grant the prayer made by the petitioner.

Hence, it is directed that the petitioner be released on bail subject to the conditions to be imposed by the trial Court, which among others, shall also include the condition to direct the petitioner to deposit his passport. Further, such other conditions shall also be imposed by the trial Court to secure the presence of the petitioner to diligently participate in the trial. It is further directed that the petitioner be produced before the trial Court forthwith, to ensure compliance of this order.”

31. On the other hand, in the case of V. Vijay Sai Reddy (supra), the Hon’ble Supreme Court of India cancelled the bail granted to the respondent/accused who was being prosecuted for an economic offence, by taking note of the fact that there are five charge sheets against the respondent/accused regarding laundering bribe money. In the above mentioned case, the Hon’ble Supreme Court of India has detailed the factors which should be kept in mind while granting bail:-

“a)

the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations.

(b)

it has to be kept in mind that for purpose of granting bail, the Legislature has used the words “reasonable grounds for believing” instead of “the evidence” which means the Court dealing with the grant of bail can only satisfy it as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge.

(c)

it is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.”

32. It is also relevant to mention here that keeping in view the nature of offence committed by the accused, the benefit of bail was denied by the the Hon’ble Supreme Court of India in the case of Nimmagadda Prasad (supra) and Amit Kumar alias Bacha Rai (supra) wherein the allegations against the appellant were for the commission of economic offences.

33. In the present case, the learned counsel for the petitioner has also referred to the principles of law laid down by the Hon’ble Supreme Court of India in the case of Gautam Kundu (supra) but the same is not applicable to the facts and circumstances of the present case as the same relates to trial for the commission of offence under the ‘Prevention of Money Laundering Act, 2002’ for which the parameters for grant of bail as prescribed by the Statute, are altogether different.

34. In the case of Y.S. Jaggan Mohan Reddy (supra) it has been observed that “economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and while granting bail Court, inter alia, has to see the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/state and other similar considerations.”

35. In the case of Adri Dharan Das (supra), it has been propounded by the Hon’ble Supreme Court of India that for grant of bail under Section 439 of Cr.P.C. (akin to Section 483 of BNSS) the accused should be in custody.

36. As far as the principles laid down in the above mentioned case is concerned, the same is not relevant in the present case as technically the petitioner who has been granted interim bail during the pendency of this bail petition, is in custody.

37. With regard to instant petition the observations made by the Hon’ble Supreme Court of India in the case of Radhika Aggarwal (supra) are relevant wherein, it has been ruled that “grounds of arrest must be given in writing to the arrestee before he is produced before the Magistrate. This is necessary as it enables the accused to contest and challenge his arrest and seek bail from the court. To deny and not give the grounds in writing would be to deprive the accused of his right in terms of Section 104(1) and also to seek right of bail under the provisions of the Code. This interpretation would be in consonance with Article 22(1) of the Constitution which states that no person who is arrested shall be detained in custody without being informed as soon as may be of the grounds of such arrest, nor shall such arrest be denied the right to consult and to be defended by a legal practitioner of his choice.” It has also been observed in the above mentioned case that “the arrest must proceed on the belief supported by reasons relying on material that the conditions specified in sub-section (5) of Section 132 are satisfied, and not on suspicion alone. An arrest cannot be made to merely investigate whether the conditions are being met. The arrest is to be made on the formulation of the opinion by the Commissioner, which is to be duly recorded in the reasons to believe. The reasons to believe must be based on the evidence establishing to the satisfaction of the Commissioner that the requirements of sub-section (5) to Section 132 of the GST Act are met.”

38. With regard to definition of term ‘arrest’, the Hon’ble Supreme Court of India in the case of Padam Narain Aggarwal (supra) has observed that “the word “arrest” is derived from the French word “arrater” meaning “to stop or stay”. It signifies a restraint of a person – “Arrest” is thus a restraint of a man’s person, obliging him to be obedient to law. “Arrest” then may be defined as “the execution of the command of a Court of Law or of a duly authorized officer.”

39. I have given consideration to the facts in the present case if the factual matrix of the present case along with relevant law is taken into consideration it transpires that

the offence is triable by the Court of Judicial Magistrate; and the maximum punishment prescribed for the offence is imprisonment upto five years;

II)

that investigation in this case is already complete and nothing is left to be recovered from the possession of petitioner;

III)

that there are very serious allegations with regard to the period of detention of the petitioner before producing him in the Court of Judicial Magistrate;

IV)

that the petitioner has been suffering from serious ailment and during custody period, he had to be shifted to hospital, which led to grant of benefit of interim bail on medical ground;

that the trial is not likely to be completed in near future;

VI)

that detention of petitioner in judicial lock-up is not likely to serve any purpose;

VII)

that there is nothing on record to show that if released on bail, the petitioner is likely to tamper with the evidence or influence the witnesses; and

VIII)

that there is nothing on record to show that if released on bail, the petitioner will not participate/cooperate in the trial.

40. With regard to the legal aspect involved in the instant case, it is relevant to mention that the Hon’ble Supreme Court in the case of Dataram v. State of Uttar Pradesh (2018) 3 Supreme Court Cases 22, has observed that “a fundamental postulate of criminal jurisprudence is the presumption of innocence, meaning thereby that a person is believed to be innocent until found guilty. However, there are instances in our criminal law where a reverse onus has been placed on an accused with regard to some specific offences but that is another matter and does not detract from the fundamental postulate in respect of other offences. Yet another important facet of our criminal jurisprudence is that the grant of bail is the general rule and putting a person in jail or in a prison or in a correction home (whichever expression one may wish to use) is an exception. Unfortunately, some of these basic principles appear to have been lost sight of with the result that more and more persons are being incarcerated and for longer periods. This does not do any good to our criminal jurisprudence or to our society. There is no doubt that the grant or denial of bail is entirely the discretion of the judge considering a case but even so, the exercise of judicial discretion has been circumscribed by a large number of decisions rendered by this Court and by every High Court in the country. Yet, occasionally there is a necessity to introspect whether denying bail to an accused person is the right thing to do on the facts and in the circumstances of a case.”

41. The principles laid down by the Hon’ble the Supreme Court of India in the case of Satender Kumar Antil v. CBI (2022) 10 SCC 51, are also relevant in this case. In the above mentioned case, it has been observed that “the rate of conviction in criminal cases in India is abysmally low. It appears to us that this factor weighs on the mind of the Court while deciding the bail applications in a negative sense. Courts tend to think that the possibility of a conviction being nearer to rarity, bail applications will have to be decided strictly, contrary to legal principles. We cannot mix up consideration of a bail application, which is not punitive in nature with that of a possible adjudication by way of trial. On the contrary, an ultimate acquittal with continued custody would be a case of grave injustice.”

42. Recently, in the case of Tapas Kumar Palit v. State of Chhattisgarh 2025 SCC Online SC 322 the Hon’ble Supreme Court of India has observed that “if an accused is to get a final verdict after incarceration of six to seven years in jail as an undertrial prisoner, then, definitely, it could be said that his right to have a speedy trial under Article 21 of the Constitution has been infringed.” It has also been observed by the Hon’ble Supreme Court of India in the above mentioned case that “delays are bad for the accused and extremely bad for the victims, for Indian society and for the credibility of our justice system, which is valued. Judges are the masters of their Courtrooms and the Criminal Procedure Code provides many tools for the Judges to use in order to ensure that cases proceed efficiently.”

43. Therefore, to elucidate further, this Court is conscious of the basic and fundamental principle of law that right to speedy trial is a part of reasonable, fair and just procedure enshrined under Article 21 of the Constitution of India. This constitutional right cannot be denied to the accused as mandated by Hon’ble Apex court in Balwinder Singh versus State of Punjab and Another Balwinder Singh v. State of Punjab 2024 SCC Online SC 4354.

44. If the cumulative effect of all the above mentioned factors, involved in the instant case, is taken into consideration, it leads to a conclusion that the petitioner is entitled for the benefit of bail, and that the present petition deserves to be allowed.

45. Accordingly, without commenting anything on the merits of the case, the present petition is hereby allowed. The petitioner is hereby ordered to be released on bail on furnishing personal bond and surety bond(s) to the satisfaction of learned trial Court, subject to the following conditions:-

that the petitioner shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case, so as to dissuade him to disclose such facts to the Court or to any other authority;

that the petitioner shall at the time of execution of bond, furnish the address to the Court concerned and shall notify the change in address to the trial Court, till the conclusion of trial;

that the petitioner shall submit a security bond equal to the amount being claimed by the complainant as tax & penalty. If the petitioner is found guilty at the conclusion of trial, the complainant would be entitled to use the above mentioned security bond for the realization of the dues from the petitioner; and

that the petitioner shall not leave India without prior permission of learned trial Court.

46. In case, the petitioner violates any of the conditions mentioned above, it shall be viewed seriously and the concession of bail granted to him shall be liable to be cancelled and the prosecution shall be at liberty to move an application in that regard.

47. It is, however, made clear that any observation made here-in-above is only for the purpose of deciding the present petition and the same shall have no bearing on the merits of the case.