The Punjab and Haryana High Court granted regular bail to Manish Kumar and Amit Kumar Goyal, both accused in a ₹107 crore GST fraud case, while issuing strong observations against the misuse of arrest powers under the Central Goods and Services Tax (CGST) Act.
The bench of Justice Harpreet Singh Brar ruled that bail cannot be denied merely on the ground that investigation is pending against a co-accused, especially when charges have already been framed against the petitioners and the trial is delayed.
Background
The petitioners were arrested in October 2024 based on allegations that they created 27 fake firms, issued fabricated GST invoices worth ₹700 crore, and fraudulently claimed input tax credit (ITC) amounting to ₹107 crore. The Financial Intelligence Unit had earlier flagged suspicious cash withdrawals totalling ₹4,938 crore, leading to a DGGI probe.
Court Criticizes Enforcement Pattern
The Court expressed alarm over a systemic pattern of arresting accused before issuing notices under Sections 73 and 74 of the CGST Act. Failing to initiate or conclude trials in such cases—despite severe allegations. Using arrest as a first step, but not pursuing conviction with equal intensity.
It was disclosed that since the implementation of the GST regime in 2017, only one conviction has occurred in Punjab, Haryana, and UT Chandigarh combined under Section 132.
Trial Delay and Liberty Concerns
The court observed that the petitioners had been in custody for over 9 months, yet no pre-charge evidence had been completed despite multiple adjournments over six months. The final investigation report had already been filed, and most evidence was electronic or documentary—already seized by the investigating agency.
The Court underscored that detaining the accused further served no purpose, especially when the investigation against them was complete and there was no risk of tampering with evidence or influencing official witnesses.
Individual Liberty vs. Pending Co-Accused Probe
The High Court firmly rejected the argument that the bail should be denied solely because the investigation against another co-accused was still ongoing. It stated:
“An accused in a complaint under Section 132 of the CGST Act cannot be denied the concession of bail solely on the ground that investigation remains pending qua a co-accused.”
It further directed that if the petitioners interfere with the investigation or violate bail conditions, the authorities would be free to seek cancellation of bail.
Bail Conditions Imposed
The bail was granted subject to surrender of passports, non-tampering of evidence, no undue delay or non-cooperation in the trial, and no disposal of business or personal properties under probe.
Case Details
Case Title: Manish Kumar Versus DGGI
Case No.: CRM-M-8675-2025(O&M)
Date: 28.07.2025
Counsel For Petitioner: Vinod Ghai, Senior Advocate
Counsel For Respondent: Sharmila Sharma, Senior Panel Counsel
Read More: No More Bail on Monetary Undertakings: Supreme Court Slams Misuse
