IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN

AT JAIPUR BENCH, JAIPUR

PREM KUMAR VS. UNION OF INDIA (DGGI)

S.B. Criminal Misc. Bail Application No. 12409/2025

I. Facts of the Case

• The present bail application arose from proceedings initiated under Section 132 of the CGST Act, 2017. The petitioner was arrested on allegations of wrongful availment and passing of Input Tax Credit through invoices issued without actual supply of goods.
• The prosecution alleged that the petitioner facilitated fraudulent ITC amounting to approximately ₹6.49 crore by routing invoices through certain entities.
• On behalf of the petitioner, it was contended that the transactions were supported by purchase invoices and corresponding GST payments. It was further pointed out that part of the alleged liability already stood discharged by the concerned entities, thereby substantially reducing the effective exposure.
• The petitioner has remained in custody since 03.09.2025 and has no criminal antecedents.

II. Issue

• Whether continued custody of the petitioner was justified in a prosecution under Section 132 of the CGST Act, particularly where the case rests predominantly on documentary and electronic evidence.

III. Contentions

Petitioner’s Submissions

• Learned Senior Counsel appearing for the petitioner submitted that the entire case of the department is founded on documentary material which already stands seized. In such circumstances, it was urged that continued incarceration serves no investigative purpose.
• It was further submitted that the discrepancies sought to be relied upon by the department, including those relating to transportation data, are matters of evidence to be tested at trial and do not conclusively establish absence of supply at this stage.
• Emphasis was also laid on the fact that deposits made by the concerned entities materially reduce the alleged liability, and that the petitioner, having no criminal antecedents, does not present any risk of absconding or misuse of liberty.

Revenue’s Submissions

• The department opposed the application, contending that the petitioner was involved in a systematic scheme of issuing fake invoices and passing on ineligible ITC. It was submitted that economic offences of this nature warrant a strict approach and that there exists a possibility of interference with the investigation.

IV. Judgments Relied Upon

Cases relied upon by Petitioner:

Reliance was placed on the following decisions in support of the grant of bail:

1. Radhika Agarwal v. Union of India and Others; 2025 INSC 272
2. Ratnambar Kaushik v. Union of India; (2023) 2 SCC 621
3. Vineet Jain v. Union of India; Criminal Appeal No. 2269/2025, decided on 28.04.2025
4. Ankur Agrawal v. Union of India and Others; 2025:RJ-JP:23266
5. Gopal Rawat v. Union of India; 2025:RJ-JP:28637
6. Ashutosh Garg v. Union of India; CRLMB 548/2024, decided on 06.03.2024
7. Naresh Kumar Agarwal v. Union of India and Others; CRLMP 3102/2025, decided on 21.04.2025

    These authorities emphasise that in GST prosecutions founded on documentary evidence, custodial detention is not to be continued as a matter of course, and the requirement of arrest must be tested on settled principles of necessity and proportionality.

Cases relied upon by Respondent:

Reliance was placed on the following decisions against the grant of bail:

1. Y.S. Jagan Mohan Reddy v. CBI; (2013) 7 SCC 439
2. State of Gujarat v. Mohanlal Jitamalji Porwal; (1987) 2 SCC 364
3. Nimmagadda Prasad v. CBI; (2013) 7 SCC 466
4. Serious Fraud Investigation Office v. Nittin Johari; (2019) 9 SCC 165
5. State of U.P. v. Amarmani Tripathi; (2005) 8 SCC 21
6. Tarun Kumar v. Assistant Directorate of Enforcement; SLP (Crl.) No. 9431 of 2023

The remaining authorities reiterated the seriousness of economic offences, without displacing the settled parameters governing grant of bail.

V. Ratio & Decision

• The Court, upon consideration of the material on record, observed that the case against the petitioner is founded on documentary and electronic evidence which is already in possession of the department. In such circumstances, the necessity of continued custody stood considerably diluted.
• It was further noted that the question whether actual supply of goods had taken place is essentially a matter for trial. At the stage of bail, a detailed examination of such issues is neither warranted nor appropriate.
• The Court also took into account the absence of criminal antecedents, the period of custody, and the fact that the trial is likely to take time.
• Having regard to the overall facts and circumstances, the Court held that continued incarceration of the petitioner was not justified and that the case was fit for grant of bail.

Operative Order

• The bail application was allowed. The petitioner was directed to be released on bail subject to conditions, including furnishing of personal bond and sureties, deposit of passport, and restriction on leaving the country without prior permission.