The Gujarat High Court has refused to cancel the bail of a businessman accused of tax irregularities under the Central Goods and Services Tax (CGST) Act, holding that he had complied with the earlier condition to deposit ₹90 lakh with the government despite a departmental dispute over the mode of payment.
The bench of Justice Divyesh A. Joshi dismissed the plea filed by the Superintendent (Anti-Evasion) of Central GST & Central Excise, Gandhinagar, who claimed that the accused, Virbhadrasinh Pratapsinh Chauhan, had not genuinely deposited the amount as required, since it was credited only to his Electronic Cash Ledger and not debited via Form GST DRC-03.
The department argued that the deposit remained under the accused’s control and had not reached the government exchequer. According to the prosecution, this constituted a breach of bail conditions imposed by the court, which required Chauhan to pay ₹90 lakh within seven days.
Chauhan’s lawyer, Advocate Apurva Mehta, submitted proof that the full amount was deposited on November 1, 2024, with ₹45 lakh each credited toward CGST and SGST. He cited Section 49 of the CGST Act and a 2024 High Court ruling in Arya Cotton Industries v. Union of India to assert that once payment is credited to the government’s account, it is deemed complete.
After examining the records, Justice Joshi ruled that Chauhan had complied with the bail condition and that the payment was properly reflected in government records. The judge noted that “mere apprehension” about possible misuse of the amount did not justify bail cancellation, especially when the accused had offered an undertaking not to claim or use the funds.
Case Details
Case Title: Superintendent (AE) Versus Virbhadrasinh Pratapsinh Chauhan & Anr.
Case No.: R/Criminal Misc.Application (For Cancellation Of Bail) No. 24758 Of 2024
Date: 25/09/2025
Counsel For Petitioner: Hardika Vyas
Counsel For Respondent: Apurva N Mehta
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