Delhi HC Pulls Up DGGI for Delay In Probe; Refuses to Cancel Bail in Rs. 72 Crore GST Evasion Case

The Delhi High Court has dismissed a petition filed by the Directorate General of GST Intelligence (DGGI) seeking cancellation of bail granted to an accused in a high-value GST evasion case involving alleged tax evasion of nearly ₹72 crore through clandestine supply of cigarettes. The bench of Justice Amit Mahajan agreed that the trial court erred in granting bail at an early stage in a serious economic offence, it refused to interfere due to the investigating agency’s prolonged and unexplained delay in completing the investigation and filing the complaint. The case arose from a petition under Section 482 of the Code of Criminal Procedure challenging an order dated August 17, 2020, passed by the Chief Metropolitan Magistrate, Patiala House Courts, granting bail to the accused in proceedings initiated under Section 132 of the Central Goods and Services Tax Act, 2017. The accused had been arrested on July 20, 2020, on allegations of large-scale GST evasion amounting to approximately ₹72 crore. The trial court had granted bail after noting that the accused had deposited ₹1.35 crore towards GST liability, that the final adjudication of tax dues was yet to be completed, and that the filing of a criminal complaint was likely to take time. The Magistrate also observed that there was no justification to keep the accused in continued custody when the details of the alleged tax-evasive entities were already within the department’s knowledge. Before the High Court, the DGGI contended that the Magistrate failed to appreciate the gravity and magnitude of the offence and erred in granting bail at a nascent stage of investigation in a serious financial crime. It was argued that deposit of ₹1.35 crore was insignificant when compared to the alleged evasion of ₹72 crore and should not have weighed in favour of granting bail. The High Court, while examining the impugned order, observed that the trial court appeared to have given undue importance to the partial deposit made by the accused and failed to take a proper prima facie view of the seriousness of the allegations. Justice Amit Mahajan noted that economic offences are grave in nature, have serious repercussions on the nation’s economy, and must be approached differently while considering bail, relying on established Supreme Court precedents including State of Gujarat v. Mohanlal Jitamalji Porwal and Y.S. Jagan Mohan Reddy v. CBI. However, the Court also took strong note of the conduct of the investigating agency. It was recorded that despite the investigation having commenced in 2020, no criminal complaint had been filed even after more than five years. The Court observed that the investigation was still stated to be incomplete and the department continued to remain in the process of filing the complaint. In these circumstances, the Court held that even if the accused had remained in custody, he would have been entitled to default bail due to the failure of the department to complete the investigation within the stipulated period. The Court remarked that the lackadaisical and lethargic approach of the department did not justify curtailing the liberty already granted to the accused. The High Court further noted that there was no allegation that the accused had misused the liberty granted by way of bail over the past several years. It observed that the apparent focus of the department seemed to be on securing custody rather than expeditiously prosecuting and adjudicating the case. The Court held that an accused cannot be subjected to indefinite incarceration merely due to inaction on the part of the investigating agency. Accordingly, while acknowledging that the Magistrate ought to have shown greater sensitivity to the gravity of the alleged economic offence, the High Court refused to cancel the bail granted in 2020 and dismissed the DGGI’s petition, bringing an end to the challenge after more than five years of pendency. Case Details Case Title: DGGI Versus Kamal Kishore Aggarwal Case No.: CRL.M.C. 1786/2020 Date: December 17th, 2025 Counsel For Petitioner: Satish Aggarwala Counsel For Respondent: Ankit Acharya Click Here To Read Order Read More: GST Dept. Can’t Seize Cash Without Evidentiary Link to Tax Evasion: Calcutta High Court

Delhi HC Pulls Up DGGI for Delay In Probe; Refuses to Cancel Bail in Rs. 72 Crore GST Evasion Case

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Delhi HC Pulls Up DGGI for Delay In Probe; Refuses to Cancel Bail in Rs. 72 Crore GST Evasion Case

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