CHARTERED ACCOUNTANT GRANTED BAIL IN ₹40 CR GST EVASION CASE

ISSUE

Whether a Chartered Accountant, alleged to have connived in a GST fraud of over Rs. 40 Crores, is entitled to bail after spending two months in custody, considering the offense is triable by a Magistrate and relies primarily on documentary evidence.

FACTS

The Accused: The applicant is a Chartered Accountant.
The Allegation: The prosecution alleged that the applicant connived with other accused persons to commit GST evasion amounting to more than Rs. 40 Crores.
Custody Period: The applicant had been in jail for almost two months.
Nature of Offense: The alleged offense under Section 132 of the CGST Act is punishable with a maximum sentence of five years and is triable by a Magistrate First Class.
Status of Investigation: The investigation was complete, and a complaint had already been filed. The prosecution’s case relied entirely on documentary evidence.
Criminal History: The applicant had no prior criminal record apart from this instant case.

DECISION

Proportionality: The High Court observed that the applicant had already spent significant time in custody (2 months) relative to the maximum possible sentence (5 years).
Nature of Evidence: Since the entire case is based on documentary evidence (which is already seized/filed), the risk of tampering is minimal compared to cases relying on oral testimony.
Trial Duration: Acknowledging that the trial would take a considerable amount of time to conclude, keeping the professional incarcerated indefinitely was not justified.
Relief: The Court granted bail to the applicant, subject to furnishing a personal bond and two sureties.
Verdict: [Bail Granted / In Favour of Assessee]

KEY TAKEAWAYS

Magistrate Triable Offences: For GST offenses punishable with up to 5 years (evasion between 2-5 Crores or specific cases), the fact that the case is triable by a Magistrate often weighs in favor of bail, as these are considered less heinous than Sessions triable offenses (like murder/rape).
Documentary Evidence Defense: In white-collar crimes (tax fraud), once the Department has seized all documents and filed the complaint, the grounds for “custodial interrogation” or “fear of tampering” weaken significantly, paving the way for bail.
Professional Status: While professional expertise (CA) can be an aggravating factor for the crime (breach of trust), courts often consider the lack of criminal antecedents and the professional’s roots in society when deciding bail.

HIGH COURT OF ALLAHABAD

Lokesh @ Lokesh Hasija

Union of India

Sameer Jain, J.

CRIMINAL MISC. BAIL APPLICATION No. 40806 of 2025

NOVEMBER 27, 2025

Somya Chaturvedi, Sr. Adv. for the Applicant. Dhananjay Awasthi for the Respondent.

ORDER

1. Counter affidavit filed by DGGI is taken on record.

2. Heard Sri Gopal S. Chaturvedi, learned Senior Advocate assisted by Ms. Somya Chaturvedi, learned counsel for the applicant and Sri Dhananjay Awasthi, learned counsel appearing for the DGGI.

3. The instant application has been filed seeking release of the applicant on bail in Case Crime No.DGGI/INV(GST) 1498/2025 GRA under Section 132(1) (b), 132(1) (i) of GST Act 2017 Police Station DGGI, KRU District Kanpur Nagar.

4. Learned counsel for applicant submits applicant is a chartered accountant and as per allegations the other accused persons with his connivance committed the GST evasion in the tune of more than 40 crores but entire allegation against him is totally false.

5. He further submitted that even for the alleged offence maximum five years punishment is provided and applicant is in jail since 02.10.2025 i.e. last almost two months and even alleged offence is triable by Magistrate.

6. He further submits, after investigation complaint has been filed and as entire prosecution case is based on documentary evidence, therefore, there is no likelihood that trial will conclude in near future.

7. He further submitted that apart from the present case, applicant is having no criminal history to his credit.

8. Per contra, learned counsel for DGGI opposed the prayer for bail but could not dispute the arguments on facts advanced by learned counsel for the applicant.

9. I have heard learned counsel for the parties and perused the record of the case.

10. However, it is case of fraud of GST of about forty crores but the alleged offence is punishable with maximum sentence of five years and applicant is in jail since 02.10.2025 i.e. last almost two months and alleged offence is triable by Magistrate.

11. Further, it reflects, after investigation, complaint has been filed and considering the fact that entire case of prosecution is based on documentary evidence trial will take considerable period of time.

12. Further, apart from the present case, applicant is having no criminal history to his credit.

13. The Apex Court in case of Ratnambar Kaushik v. Union of India GST 548/68 GSTL 233 (SC)/2023 (2) SCC 671 enlarged the accused on bail considering the facts that prosecution case is based on documentary and electronic evidence and investigation has been completed and accused is in jail for four months and in paragraph no.8 the Apex Court observed as:-

“8. 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.”

14. Further Apex Court recently in the case of Vineet Jain v. Union of India GSTL 129 (SC)/MANU/SCOR/ 38321/2025 while granting bail to accused under the provisions of C.G.S.T. Act observed as:-

“.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.”

15. Therefore, from the observation made by the Apex Court in case of Vineet Jain (supra) it reflects, ordinarily an accused should be released on bail for offence under Section 132(1) C.G.S.T. Act.

16. Therefore, considering the facts and circumstances of the case discussed above, in my view, applicant is entitled to be released on bail.

17. Accordingly, without expressing any opinion on the merits of the case, the instant bail application is allowed.

18. Let the applicant- Lokesh @ Lokesh Hasija be released on bail in the aforesaid case on furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned with the following conditions:-

(i)

The applicant shall appear before the trial court on the dates fixed, unless his personal presence is exempted.

(ii)

The applicant shall not directly or indirectly, make inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or any police officer or tamper with the evidence.

(iii)

The applicant shall not indulge in any criminal and anti-social activity.

19. In case of breach of any of the above condition, the prosecution will be at liberty to move an application before this Court for cancellation of the bail of the applicant.