The Rajasthan High Court at Jaipur has granted bail to a transporter accused in a GST evasion case involving an alleged tax liability of approximately Rs. 26.47 crore, taking note of the fact that there was no specific calculation of GST allegedly payable by the accused himself.
The bench of Justice Chandra Prakash Shrimali considered the prosecution witness’s statement that the accused was a transporter and neither a manufacturer nor a supplier of goods, and that no GST calculation had been made against him.
The Court’s order is significant because it examines the distinction between allegations of GST evasion arising from transportation of goods and the personal GST liability attributable to a transporter. While the prosecution alleged that the accused played an active role in facilitating clandestine transportation of goods without valid invoices and e-way bills, the High Court found that the record did not contain a quantified GST liability specifically against him.
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According to the prosecution, the accused operated a firm named P.R. Logistics and was allegedly involved in issuing fake bilties for transportation of goods for Murlivala Textile and other firms without corresponding invoices and e-way bills.
The prosecution alleged that goods having a value of approximately ₹1,48,64,28,129 were transported through this arrangement, resulting in alleged GST evasion of around ₹26,47,06,966. It was further argued that the accused’s role was not confined merely to transporting goods but extended to facilitating the clandestine transportation network.
The Department opposed bail by emphasising the seriousness of the allegations. It argued that the accused had actively facilitated the movement of goods without proper invoices and e-way bills and had thereby contributed to GST evasion. The prosecution also relied upon the alleged economic nature of GST offences and submitted that the gravity of the allegations warranted continued detention.
The defence took a fundamentally different position.
It argued that Yadav was only a transporter and was neither the manufacturer nor the supplier of the goods in question. According to the defence, the record did not contain any calculation determining the amount of GST actually payable by Yadav.
The defence specifically relied upon the pre-charge statement of prosecution witness Mahesh Kumar. As recorded by the High Court, the witness stated that there was no GST calculation in the case papers against the accused and no such calculation had been carried out. The witness further stated that GST determination could not be made without calculation and that the amount of GST allegedly outstanding from Yadav had not been determined.
The defence therefore argued that simply because the accused had transported goods, it could not automatically be concluded that he was personally liable for the GST allegedly evaded by the manufacturers or suppliers.
After considering the rival submissions and examining the material on record, the High Court gave considerable weight to the absence of a quantified GST liability against the accused.
The Court noted that the prosecution witness had clearly stated that no GST calculation had been made against Yadav. The Court further observed that Yadav was a transporter and was not a manufacturer or supplier. According to the Court, he had transported goods from one place to another.
The Court also noted that, on the basis of transportation of goods, GST could at most be calculated at a particular rate per kilogram, but even such calculation had not been undertaken by the complainant against the accused.
This aspect became particularly relevant at the bail stage because the Court was not being asked to finally determine whether GST evasion had occurred or to decide the guilt of the accused. Instead, it was examining whether continued incarceration was justified in the circumstances of the case.
The High Court observed that Yadav’s firm, P.R. Logistics, had transported goods for Murlivala Textile and other firms.
The Court noted that if there was a GST offence arising from the underlying supply transactions, such allegations could potentially be considered against the concerned firms. However, the material relied upon by the Court did not establish a quantified GST liability against the transporter in the same manner.
The Court also referred to an earlier decision of the Allahabad High Court in Dilip Kumar Jha v. Union of India, where bail had been granted in circumstances involving an accused who was a transporter and was not the manufacturer or supplier of the goods. The Rajasthan High Court noted this precedent while considering the nature of the alleged offence in the present case.
The DGGI, however, placed a more serious version of the accused’s role before the Court.
According to the Department, Yadav had himself admitted that his role was not restricted to transportation. The prosecution contended that he was also involved in operating a clandestine transportation arrangement and acting as a facilitator.
The Department alleged that goods were transported without proper invoices and e-way bills and that the accused actively assisted in expanding the network through which such goods were moved. It further argued that courts have treated GST evasion as an economic offence of a serious nature.
The prosecution therefore urged the Court to reject the bail application considering the alleged magnitude of the GST evasion and the seriousness of the allegations.
Another important factor considered by the High Court was the period of custody.
The Court recorded that Yadav had been in custody since April 12, 2026, and that the chargesheet had already been filed. The Court further observed that the trial would take time to conclude.
The Court also considered the factual circumstances, the arguments advanced by both sides and the period of incarceration before deciding to grant bail without expressing any opinion on the merits of the case.
Ultimately, the Rajasthan High Court allowed Yadav’s bail application.
The Court directed that he be released on bail subject to furnishing a personal bond of ₹1 lakh along with two sureties of ₹50,000 each, to the satisfaction of the concerned trial court.
The Court also directed the accused to remain present before the trial court or other concerned court on the dates fixed and whenever his presence was specifically required.
The order further directed that a copy of the bail order be sent to the concerned jail through email in accordance with the Supreme Court’s directions concerning implementation of bail orders.
Importantly, the High Court’s decision is confined to the question of bail. The Court did not adjudicate the accused’s guilt or hold that the alleged GST evasion had not taken place.
The prosecution’s allegations regarding transportation without invoices and e-way bills, fake bilties and the alleged GST evasion of approximately ₹26.47 crore will remain matters for consideration during the trial.
What weighed with the High Court at the bail stage was, among other factors, the absence of a specific quantified GST liability against the accused, the prosecution witness’s statement regarding the lack of such calculation, the accused’s status as a transporter rather than manufacturer or supplier, the filing of the chargesheet and the period already spent in custody.
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