The Punjab and Haryana High Court has granted regular bail to two persons accused of operating a multi-layered online money-gaming network that allegedly suppressed taxable receipts and caused GST evasion of approximately ₹156 crore.
The bench of Justice Shalini Singh Nagpal has observed that the petitioners had already spent more than four months in custody and that an early conclusion of the trial appeared unlikely. Their continued detention, it held, would serve no useful purpose.
The proceedings arose from an intelligence case registered by the Directorate General of GST Intelligence’s Chandigarh Zonal Unit on May 1, 2026.
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The petitioners were accused of offences under Section 132(1)(a), read with Section 132(5), of the Central Goods and Services Tax Act, 2017, and the corresponding provisions of the Integrated Goods and Services Tax Act, 2017.
According to the DGGI, the accused were involved in an organised arrangement for supplying online money-gaming services, including real-money card games such as Teen Patti and Rummy.
The department alleged that the gaming transactions were routed through several payment gateways, bank accounts and companies that were either non-genuine or created specifically to facilitate the arrangement. The actual taxable receipts generated from gaming activities were allegedly suppressed in the GST returns, resulting in a substantial loss of revenue.
The DGGI claimed that Manish Kumar Aggarwal was the chief executive officer of Dhanik Traders (OPC) Private Limited, which allegedly functioned as the central nodal payment and payout account for the entire network.
Hundreds of crores of rupees were purportedly routed through the company’s accounts.
Navinder Singh Sahdev was stated to be a director of Dhanik Traders and the proprietor of Vansh Enterprises. The department alleged that the two petitioners exercised actual control over the companies, including their banking operations, statutory compliances and filing of GST returns.
According to the prosecution, the petitioners instructed their chartered accountants to report only the commission earned by the firms rather than the full amount received from online gaming operations.
The company’s website was allegedly presented as an e-commerce portal, although no products were actually sold through it. The DGGI contended that its real function was to facilitate deposits and payouts connected with online gaming.
The department further alleged that several companies registered as skill-based gaming or e-commerce operators were used as pay-in entities for receiving deposits from players.
These deposits were reportedly collected through the payment gateway operated by Airpay Services Private Limited.
The DGGI claimed that the companies forming part of the network were either non-existent or non-functional at their declared principal places of business. Their formally appointed directors were alleged to be dummy directors, while the petitioners purportedly handled the companies’ actual management, banking and GST compliance.
On the basis of the transactions discovered during the investigation, the department estimated the alleged GST evasion at about ₹156 crore.
Counsel appearing for the petitioners argued that the department’s case was based entirely on documents and digital material already seized by the investigating agency.
They contended that the WhatsApp conversations and disclosure statements attributed to the co-accused possessed weak evidentiary value and could not, by themselves, justify continued incarceration.
It was submitted that the petitioners could not tamper with the digital records because the relevant devices, documents and financial material were already in the department’s possession.
The petitioners also emphasised that the maximum punishment prescribed for the alleged offences was five years’ imprisonment. They relied upon the Supreme Court’s ruling in Sanjay Chandra v. CBI to argue that the seriousness of an accusation must be considered alongside the sentence prescribed by law and the necessity of keeping an accused in custody.
Their lawyers maintained that the petitioners had cooperated throughout the investigation, were not flight risks and were unlikely to influence witnesses. Since the investigation had been completed, their further pre-trial detention was said to be unnecessary.
The DGGI strongly opposed the bail applications, describing the alleged operation as a carefully planned tax-evasion scheme involving suppression of supplies, systematic under-reporting of receipts and the creation of a web of sham companies.
It argued that the petitioners occupied central positions in the arrangement and were not peripheral participants. According to the department, substantial documentary, digital and financial evidence had been collected demonstrating their involvement.
The DGGI contended that granting bail in a case involving alleged revenue loss of approximately ₹156 crore would undermine the effective administration of tax laws.
The department relied upon several judicial decisions, including the Supreme Court’s ruling in Directorate General of Goods and Services Tax Intelligence v. Gameskraft Technologies Private Limited, to support its opposition to the bail pleas.
The High Court referred to the Supreme Court’s decision in Vineet Jain v. Union of India, involving an offence under Section 132(1) of the CGST Act.
In that case, the Supreme Court had expressed surprise that bail had been denied at every level and observed that accused persons in such GST cases should ordinarily receive bail before the trial court unless extraordinary circumstances existed.
The High Court noted that similar observations had been made by the Supreme Court in Ashutosh Garg v. Union of Indiaand Vipin Garg alias Bindu v. State of Haryana.
It also relied upon Ratnambar Kaushik v. Union of India, where the Supreme Court granted bail after considering that the investigation was complete, the charge sheet had been filed, the maximum punishment was five years and the accused had already undergone four months of incarceration.
The Court additionally cited a series of orders passed by coordinate Benches of the Punjab and Haryana High Court granting bail in comparable GST prosecution cases.
While granting relief, the High Court recorded that the investigation against the petitioners had concluded. Both accused had remained in custody from May 1, 2026, amounting to four months and two days at the time of the decision.
The alleged offences were punishable with a maximum imprisonment of five years and were triable by a magistrate.
The Court found that the prosecution’s evidence was essentially documentary and that the witnesses proposed to be examined were principally government officials. Consequently, the possibility of the petitioners influencing witnesses or tampering with evidence was considered negligible.
It also noted that the petitioners had roots in society and that the trial had yet to commence. Given the nature of the prosecution record, an early completion of the trial did not appear probable.
Without expressing any opinion on the merits of the allegations, the Court concluded that keeping the petitioners in custody for a longer period would not serve a useful purpose.
The High Court directed that both petitioners be released on regular bail upon furnishing adequate bail and surety bonds to the satisfaction of the trial court or duty magistrate.
The relief was made subject to several conditions. The petitioners must surrender their passports and cannot leave India without the trial court’s permission. They must also inform the department and the trial court before changing their residential addresses.
They have been prohibited from influencing prosecution witnesses, tampering with evidence or directly or indirectly threatening, inducing or making promises to anyone acquainted with the case.
The petitioners must file affidavits undertaking to appear before the trial court on every scheduled date unless their personal appearance is specifically exempted. They have also been directed not to commit an offence similar to the one alleged against them or misuse the liberty granted by the Court.
The High Court clarified that any violation of the conditions could result in withdrawal of the protection. The DGGI has been granted liberty to seek cancellation of bail if the petitioners fail to comply with the conditions.
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