The Delhi High Court has held that the accused of fraudulent availment Input Tax Credit (ITC) passed triple test for bail. The triple test includes the questions namely whether he is a flight risk or he would influence the witnesses or tamper with the evidence.
The bench of Justice Neena Bansal Krishna has observed that the evidence is essentially documentary and there is no likelihood of the same being tampered by the Respondent after having been admitted to Bail. There is nothing to show that he is a flight Risk or there is any likelihood of his influencing the witnesses. The discretion has been rightly exercised by the CMM, while granting the Bail.
The officers of Directorate General of GST Intelligence (DGGI) developed an intelligence that M/s Aastha Apparels Pvt. Ltd., M/s JBB Apparels Pvt. Ltd., M/s JBN Apparels Pvt. Ltd., and M/s Nautilus Metal Craft Pvt. Ltd., were engaged in fraudulent availment of Input Tax Credit (ITC) on the Invoices of non-existing and fictitious Firms or such Firms which apparently did not make any purchases themselves.
It was also gathered that they were also utilizing this fraudulently availed ITC for payment of Integrated Goods and Services Tax (IGST) on export of goods (also termed as zero rated supply under IGST Act, 2017) and taking refund of such IGST from the Department. Most of such Suppliers’ Companies were owned or controlled by the Respondent/Rakesh Kumar Goyal.
Detailed investigations were carried out which included searches at the business premises of the aforesaid four companies and it was found that the Respondent along with other co-accused persons, had been involved in the acts amounting to offences under Section 132 CGST Act, 2017.
The accused was granted Bail by the CMM. The Order of grant of Bail has been challenged by the DGGI.
The DGGI contended that the first Bail was rejected by ACMM and the second Bail was rejected by ASJ. Merely after an interval of just about one month, Bail was finally granted upon the third Application on 23.12.2020. It is asserted by the Petitioner that the Bail was granted by the learned CMM, even though there was no change of circumstances.
The DGGI contended that the Respondent’s Companies and his accomplices had remained non-cooperative. Summons were issued to the sons of the Respondent for their appearance on 05.11.2020, but they remained unanswered. Likewise, summons had been issued to his sons namely, Kanav Goyal and Rajat Goyal for their appearance on various dates, but again they failed to appear.
The DGGI submitted that the accused not only consistently disobeyed the summons issued to him, but he also failed to join the investigations. He, till date, has not provided the Tally Data as asked through repeated summons, to enable the Investigating Agency to carry forward the investigation. However, no documents have been produced to show that the Tax obligation has been discharged at the time of import as part of Customs Duty.
The court held that there is no ground which exists to show that the discretion of grant of Bail has not been exercised judiciously by the CMM or that there is any misuse or abuse of liberty so granted by the accused. There is also nothing on record to show that the trial has been hampered on account of grant of Bail.
Case Details
Case Title: DGGI Versus Rakesh Kumar Goyal
Case No.: CRL.M.C. 631/2021
Date: 27/06/2025
Counsel For Petitioner: Satish Aggarwala Sr. Standing Counsel
Counsel For Respondent: Shadman Ahmed Sidiiqui, Advocate
