Sanket Mittal vs Central Gst Department
2025 Latest Caselaw 6392 P&H

Punjab-Haryana High Court

Sanket Mittal vs Central Gst Department on 18 December, 2025

CRM-M--44925-2025                        -11-

       IN THE HIGH COURT OF PUNJAB AND HARYANA AT
                       CHANDIGARH


231                                             CRM-M-44925-2025

                                                Date of Decision: 18.12.2025
                                                                    .12.2025


Sanket Mittal                                              ...Petitioner.
      v.
Central GST Department                                     ...Respondent.


CORAM: HON'BLE MS. JUSTICE AARADHNA SAWHNEY.


Present:    Mr. Dheeraj Mittal, father of
            Mr. Sanket Mittal, petitioner

            None for the respondent.

                  ****

AARADHNA SAWHNEY, J. (Oral)

1. Upon a call given by Punjab and Haryana High Court Bar

Association, the Members of the Bar are abstaining from work.

2. This petition for grant of bail under Section 483 of BNSS, has

been filed by petitioner, an accused in criminal complaint No.

518/2025 dated 5.7.2025,, titled "Mr. COMA/518 Mr. Vikas Kumar Verma, Verma

Superintendent, CGST Commissionerate v. Sh. Sanket Mittal and

" under Section 132 of Central Goods Service Tax Act, 2017 (in another,"

short "the CGST Act").

3. M/s Balaji Mobile Addition has been engaged in the trading of

mobile phones (especially I-phones).

I On perusal of GST returns available

on the GST Portal, it came to notice that M/s Balaji Mobile Addition had

availed ITC from various suppliers including M/s Monit Enterprises, who

had passed on ineligible ITC to the tune of Rs.30.4 crores to it durin during g the

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period December, 2023 to March, 2024 using goods goods-less less invoices.

Accordingly, a show cause notice dated 19.3.2024 (Annexure P P-2)

2) followed

by order dated 26.3.2024 (Annexure P-

P-3)

3) for cancellation of registration

w.e.f. 29.2.2024 were issued. Against the order (Annexure P-3),, an

application for revocation of order was filed which was rejected vide order

dated 30.4.2024 (Annexure P-4) P 4) passed by the Assistant Commissioner

holding that the tax payer firm has availed ITC to the tune of

Rs.30,54,15,229/ from Rs.30,54,15,229/- rom one M/s Monit Enterprises. The statutory appeal

preferred by petitioner against the order (Annexure P-4) was allowed vide

order dated 8.5.2024 (Annexure P-5) P 5) by revoking the cancellation and the

registration of the aforesaid firm was restored. Therea Thereafter, fter, the respondent

proceeded to freeze the ITC ledger of the firm by invoking Rule 86A of the

CGST Rules against the alleged ITC availment amounting to

Rs.30,54,15,229/ Against the action of the respondent, M/s Balaji Mobile Rs.30,54,15,229/-.

Addition filed CWP-1835802924.

CWP 4. This Court vide order date 24.9.2024

(Annexure P-6) P 6) issued an interim order directing the respondent to release

the account as well as the electronic credit ledger. The said writ petition is

pending trial adjudication. On the basis of said allegati allegations ons of fraudulent

availment and passing of ITC, petitioner, petitioner, who looks after business activities

of M/s Balaji Mobile Addition was arrested, on 6.5.2025. Thereafter,

respondent moved an application before learned Chief Judicial Magistrate,

Faridabad seeking seeking permission to record the statement of petitioner on

8.5.2025, which was allowed. Petitioner, who was arrested on 06.05.2025

has been in custody since then. Complaint was filed before the competent

Court after completion of necessary investigation/enquir investigation/enquiry, y, the same is

pending before the Court.

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4. Petitioner moved an application for grant of regular bail before

learned Chief Judicial Magistrate, Faridabad, which came to be dismissed in

terms of order dated 13.5.2025. Against the order dated 13.5.2025,

petitioner titioner moved an application before the learned Additional Sessions

Judge, Faridabad, which also came to be dismissed in terms of order dated

25.7.2025 (Annexure P-4).

P 4). Aggrieved of the same, present petition has been

filed.

5. Shri Dheeraj Mittal, father of the petitioner submits that

petitioner has ha been falsely implicated in the present case. The respondent

issued a show cause notice dated 19.3.2024 for the cancellation of GST

registration of M/s Balaji Mobile Addition which w was as followed by

cancellation order dated 26.3.2024. Petitioner filed revocation application

which was dismissed on 30.4.2024 and thereafter, filed a statutory appeal

before the appellate authority, which was allowed and the cancellation was

revoked. Respondent Respondent also proceeded to freeze the ITC credit ledger of M/s

Balaji Mobile Addition for ITC availment amounting to Rs.30 crores qua

M/s Monit Enterprises. The said action of respondent was challenged before

this Court in CWP-18358-2024 CWP 2024 and this Court vide order dated 24.9.2024

ordered for de-freezing de freezing of ITC ledger. It has been further submitted that all

purchases from M/s Monit Enterprises were made in normal course of

business and in compliance with the provisions of Section 16 of the CGST

Act. Further, M/s Balaji Phone Addition had purchased mobile phones in

the regular course of business from 187 suppliers including M/s Monit

Enterprises and all such purchases were duly reflected in the ledger account

and petitioner made the payment to its supplier incl including uding M/s Monit

Enterprises through banking channel.

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Lastly, prayer for taking a lenient view in favour of petitioner

has been made by extending him the concession of bail, for his further

incarceration would not serve any useful purpose.

Following judgments udgments have also been tendered and placed on

record:-

(i) Ganga Ram Vs. State of Punjab, (2021 (44) GSTL 5) of this Court.

(ii) Ratnambar Kaushik Vs. Union of India, (2022) 1 Centax 278 (SC) of Hon'ble Supreme Court.

(iii) Vishal Chauhan Vs. Haryana State GST (Intelligence Unit), Rohtak, ((2024) 21 Centax 434) of Punjab and Haryana High Court.

(iv) Ashutosh Garg Vs. Union of India, ((2024) 20 Centax 595 (SC)).

(v) Sandeep Singhal Vs. DGGSTI, ((2024) 16 Centax 443) of Rajasthan High Court.

(vi) Manish Kumar Vs. Directorate General, Goods and Services Tax Intelligence Zonal unit, Ludhiana, (2025- (2025 TIOL-1233-HC-P&H-GST) GST).

(vii) Manoj Gupta Vs. Union of India and others, in M No.20320 of 2025 of this Court, decided on CRM-M 10.07.2025.

6. While opposing thee petition, detailed reply has been filed by the

respondent department reiterating that petitioner iss the mastermind of the respondent-department

entire network i.e. for the generating fake invoices, passing fraudulent Input

Tax Credit without actual supply of goods causing huge loss of over Rs.30 Rs.

crores to the State Exchequer. It was alleged in the reply that entire search

proceedings were conducted in accordance with law, thus no question of any

threat, coercion or intimidation against the petitioner arises and petitioner

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himself voluntarily admitted regarding their role in operating various bogus

firms, purchasing their credentials, issuing fake invoices and passing

fraudulent ITC. Further investigation reveals that all the major suppliers of

bogus taxpayer firm were found to be non non-existent.

existent. The evidence collected

during the course of investigations, statements recorded of various

concerned persons, have also been referred to in the reply.

Reference has been made to various judgments of Hon'ble

Supreme Court, as also that of the other High Courts, in support of its stand

that petitioner, at whose instance these transactions of goods goods-less less invoices

occurred/created does do not deserve the concession of bail, for if the relief

sought for is extended, there is every likelihood of him (petitioner) indulging

in same offence, fleeing from the process of justice by not appearing in the

Court and to tamper with the evidence. Dismissal of the petition has been

prayed for.

Reliance has been placed on the following judgments:

judgments:-

1) SFIO Vs. Nitin Johari and another, in Crl. Appeal No.1381/2019 dated 12.09.2019 of Hon'ble Supreme Court.

2) Narain Popli Vs. CBI, (AIR 2003 SCC 3257) of Hon'ble Supreme Court.

3) P.V. Ramana Reddy Vs. Union of India in Writ Petition No.4764 of 2019 of Telangana High Court.

4) Shailesh Rajpal Vs. Commissioner, (2020 (32) G.S.T.L. 336) of Madhya Pradesh High Court.

7. I have heard Mr. Dheeraj Mittal, father of petitioner and have

also gone through the material available on record.

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8. Before expressing any opinion on the merits of the rival

contentions, it would be appropriate to carefully go through Section 132

CGST Act, which reads as under: -

"132. Punishment for certain offences.

offences.--

(1) Whoever commits any of the following offences, namely:--

(a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax;

(b) issues any invoice or bill without supply of goods or services or both in violation of the prov provisions isions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;

(c) avails input tax credit using such invoice or bill referred to in clause

(b); shall be punishable--

(i) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five year and with fine.

(ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred lakh rupees, with imprisonment for a term which may extend to three years and with fine;

(iii) in the case of any other offence where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred lakh akh rupees, with imprisonment for a term which may extend to one year and with fine;"

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A bare perusal of the aforesaid provision leaves no doubt that

the offences alleged to have been committed by the petitioner are punishable

with imprisonment for a term which may extend to 05 years and fine,

meaning thereby that the maximum terms of imprisonment is 05 years years.

Economic offences by their very nature pose threat to the

State's financial stability and deserve to be dealt with sternly sternly.. Question that

arises is as to what criteria/factors/circumstances need to be kept in mind

while dealing with the petition for grant of bail in such economic offences.

At this stage, it would be most appropriate to refer to recent judgment of

Hon'ble Supreme Court in "Vineet " Jain in Vs. Union of India (Criminal

Appeal No.2269 of 2025 (arising out of SLP(Crl.) No.4349 of 2025), 2025)

wherein while discussing the current state of affairs with regard to grant of

bail arising out of CGST cases, it was held as under:

under:-

"The offences alleged against ainst the appellant are under Clauses

(c), (f) and (h) of Section 132(1) of the Central Goods and Services Tax Act, 2017. The maximum sentence is of 5 years with fine. A charge-sheet sheet has been filed. The appellant is in custody for a period of almost 7 mon months.

ths. The case is triable by a Court of a Judicial Magistrate. The sentence is limited and in any case, the prosecution is based on documentary evidence. There are no antecedents.

We are surprised to note that in a case like this, the appellant has been denied ied the benefit of bail at all levels, including the High Court and ultimately, he was forced to approach this Court. These are the cases where in normal course, before the Trial Courts, the accused should get bail unless there are some extra ordinary circumstances cumstances."

Appropriate here would also be to refer to judgment of Hon'ble

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Supreme Court in Sanjay Chandra Vs. CBI, (2012(1) SCC 40)

40),, wherein the

Sessions Court and the High Court had declined the bail applications of the

accused, who had been alleged of committing forgery and cheating, on the

ground that the offences are serious, involved deep rooted planning and huge

loss had been caused to the Exchequer, as also that if allowed the relief of

bail the possibility of accused tampering with the evidenc evidencee could not be

ruled out. In that context, Hon'ble Supreme Court held as under:

under:-

"43. When the undertrial prisoners are detained in jail custody to an indefinite period, Article 21 of the Constitution is violated. Every person, detained or arrested, is ent entitled itled to speedy trial, the question is: whether the same is possible in the present case. There are seventeen accused persons. Statement of the witnesses runs to several hundred pages and the documents on which reliance is placed by the prosecution, is voluminous.

uminous. The trial may take considerable time and it looks to us that the appellants, who are in jail, have to remain in jail longer than the period of detention, had they been convicted. It is not in the interest of justice that accused should be in jail for an indefinite period. No doubt, the offence alleged against the appellants is a serious one in terms of alleged huge loss to the State exchequer, that, by itself, should not deter us from enlarging the appellants on bail when there is no serious contention tion of the respondent that the accused, if released on bail, would interfere with the trial or tamper with evidence. We do not see any good reason to detain the accused in custody, that too, after the completion of the investigation and filing of the charge-sheet.

44. This Court, in the case of State of Kerala v. Raneef, 2011(1) RCR (Criminal) 381 : 2011(1) Recent Apex 784, has stated :-

Judgments (R.A.J.) 116 : (2011)1 SCC 784 "15. In deciding bail applications an important factor which should certainly be ttaken aken into consideration by the

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court is the delay in concluding the trial. Often this takes several years, and if the accused is denied bail but is ultimately acquitted, who will restore so many years of his life spent in custody? Is Article 21 of the Cons Constitution, titution, which is the most basic of all the fundamental rights in our Constitution, not violated in such a case? Of course this is not the only factor, but it is certainly one of the important factors in deciding whether to grant bail. In the present casee the respondent has already spent 66 days in custody (as stated in Para 2 of his counter-

counter affidavit), and we see no reason why he should be denied bail. A doctor incarcerated for a long period may end up like Dr. Manette in Charles Dicken's novel A Tale of Two Cities, who forgot his profession and even his name in the Bastille.

xxx xxx xxx

39. Coming back to the facts of the present case, both the Courts have refused the request for grant of bail on two grounds :- The primary ground is that offence alleged leged against the accused persons is very serious involving deep rooted planning in which, huge financial loss is caused to the State exchequer ; the secondary ground is that the possibility of the accused persons tempering with the witnesses. In the prese present nt case, the charge is that of cheating and dishonestly inducing delivery of property, forgery for the purpose of cheating using as genuine a forged document. The punishment of the offence is punishment for a term which may extend to seven years. It is, no doubt, true that the nature of the charge may be relevant, but at the same time, the punishment to which the party may be liable, if convicted, also bears upon the issue. Therefore, in determining whether to grant bail, both the seriousness of the charge

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CRM-M--44925-2025 -10 10-

and the severity of the punishment should be taken into consideration.

40. The grant or refusal to grant bail lies within the discretion of the Court . The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden den of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the Court , whether before or after conviction, to assure that he will submit to the jurisdiction of the Court and be in attendance thereon whenever enever his presence is required.

41. This Court in Gurcharan Singh and Ors. v. State, AIR 1978 Supreme Court 179 observed that two paramount considerations, while considering petition for grant of bail in non non-bailable bailable offence, apart from the seriousness off the offence, are the likelihood of the accused fleeing from justice and his tampering with the prosecution witnesses. Both of them relate to ensure of the fair trial of the case. Though, this aspect is dealt by the High Court in its impugned order, in ou ourr view, the same is not convincing.

xxx xxx xxx

46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge sheet is already filed before the Special

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CRM-M--44925-2025 -11 11-

Judge, CBI, New Delhi. Therefore, their presence in the custody mayy not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI."

(emphasis added)

Further still, recently, in n Ashutosh Garg's case (supra), Hon'ble

Supreme Court granted bail in a matter where the accused defrauded the

State exchequer of Rs.1032 crore as Input Tax Credit by creating 294 fake

firms, citing long custody of 09 months as well as the fact that maxi maximum mum

punishment in the offence under Section 132 CGST Act is 05 years.

A two Judge bench of the Hon'ble Supreme Court in

(supra), deliberated upon the largely Ratnambar Kaushik's case (supra),

documentary and electronic nature of evidence as well as the prolonged trial

in matters pertaining to tax evasion under the CGST Act, where the accused

had undergone about 4 months of custody, and opined as follows:

"6. In considering the application for bail, it is noted that the petitioner was arrested on 21.07.2022 and while in custody, the investigation has been completed and the charge sheet has been filed. Even if it is taken note that the alleged evasion of tax by the petitioner is to the extent as provided under Section 132(1)

(l)(i), the punishment provided is, imprisonment which may extend to 5 years and fine. The petitioner has already undergone incarceration for more than four months and completion of trial, in any event, would take some time.

Needless to mention that the petitioner if released on bail, is required to adhere to the conditions to be imposed and diligently participate in the trial. Further, in a case of the present nature, the evidence to be tende tendered red by the respondent would essentially be documentary and electronic. The ocular

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CRM-M--44925-2025 -12 12-

evidence will be through official witnesses, due to which there can be no apprehension of tampering, intimidating or influencing. Therefore, keeping all these aspects in perspective, pective, in the facts and circumstances of the present case, we find it proper to grant the prayer made by the petitioner.

7. Hence, it is directed that the petitioner be released on bail subject to the conditions to be imposed by the trial Court, which among mong others, shall also include the condition to direct the petitioner to deposit his passport. Further, such other conditions shall also be imposed by the trial Court to secure the presence of the petitioner to diligently participate in the trial. It is further urther directed that the petitioner be produced before the trial Court forthwith, to ensure compliance of this order."

(emphasis added) It thus emerges that even in cases involving economic offences,

the Court seized of the matter has to go through the ggravity ravity of the offence,

the object of the Act, the attending circumstances, etc. Thus, economic

offences cannot be categorized in one group and the Court should not

proceed on the presumption that "Denial of Bail is the Rule and grant being

the exception".

exception"

9. In the case in hand, the allegations against petitioner iss that he

is key-person person in creating/operating firms and wrongfully availed/passed

input tax credit amounting to over Rs.30 30 crores, thus, causing loss to the

State Exchequer. These claims are yet to be proved. The fact that he has

been in custody since 06.05.2025, 0 .2025, has been admitted by the respondent

department. His (petitioner) further detention is not justified as the evidence

to be rendered by complainant-department complainant department is primarily documentary and

electronic. The same (further incarceration) would be violative of his right

under Article 21 of the Constitution of India, including right to speedy trial

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CRM-M--44925-2025 -13 13-

and would, thus, also be against the principle of "Bail is a general rule and

incarceration is an exception"

exception" as held by Hon'ble Supreme Court in

Dataram vs. State of Uttar Pradesh and another, 2018(2) R.C.R.

(Criminal) 131.

10. Resultantly, petitioner is granted the concession of bail subject

to his furnishing bail bonds and two sound sureties of Rs.1 lakh each to the

satisfaction of learned trial Court/Duty Magistrate concerned. The petitioner

shall abide by the following conditions:-

conditions:

(i) The petitioner will surrender their passports and will not leave the country without prior permission of the trial Court.

(ii) The petitioner will not tamper with the evidence during the trial.

(iii) The petitioner will not pressurize/ intimidate the prosecution witnesses.

(iv) The petitioner will appear before the trial Court on each and every date fixed, unless is exempted by a specific specifi order of Court.

(v) The petitioner shall not commit an offence similar to the offence of which, they are accused, or for commission of which they are suspected of.

(vi) The petitioner shall not directly or indirectly coerce, induce, threaten or promise to any per person son acquainted with the facts of the case so as to dissuade him/her from disclosing such facts to the Court or to any police officer or tamper with the evidence in any manner.

vii) The petitioner shall not in any manner misuse their liberty.

(vii) The petitionerr shall furnish his address and mobile number to the Trial Court forthwith and shall not change the same till the conclusion of the trial and in case for

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CRM-M--44925-2025 -14 14-

any reason, the petitioners seek to change any of the aforesaid, the same shall be done only with prior prio intimation to the learned Trial Court, stating the reason for the same.

(viii) The trial Court/Duty Magistrate may impose any other condition, as deemed appropriate while releasing the petitioner.

11. Accordingly, the present petition is allowed and it is made clear

that in case there is any breach of the aforesaid conditions, the State shall be

at liberty to seek cancellation of bail as granted to petitioner by this Order.

12. In view of the above, it is clarified that the observations made

herein are limited limited for the purpose of present proceedings and would not be

construed as an opinion on the merits of the case and the trial would proceed

independently of the aforesaid observations.

                                                    (AARADHNA SAWHNEY)
18.12.2025                                                JUDGE
gbs


             Whether Speaking/reasoned              :   Yes/No
             Whether Reportable                     :   Yes/No




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