Ankur Garg V. Union of India

BAIL/47559/2024

AI Insights

Ankur Garg filed an application for regular bail under Section 439 of the Cr.P.C. during the pendency of his trial for alleged involvement in a scheme to avail ineligible Input Tax Credit through non-existent firms, as per the Central Goods and Services Tax Act, 2017. The applicant was accused of managing the affairs of M/s Aadya Trading Company, which was implicated in passing on fake tax credits to various beneficiaries. The bail application was initially rejected by the Additional District & Sessions Judge, leading to this appeal. The prosecution opposed the bail citing the gravity of the offense and the substantial amount of fake tax credit involved. However, the court found that the trial was likely to be prolonged and the applicant had already spent a significant amount of time in custody without the trial commencing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 811191 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 22-04-2025
• Assessment Year: misc
• Laws Referred To: Central Goods and Services Tax Act, 2017
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PARV AGARWAL
• Assessee Lawyers: AYANK MISHRA
• Keywords: Input tax credit; Judicial Custody; Non-existent Firms; Regular bail; Prosecution witness
• Section: 70; 439; 132(1)(c); 132(1)(i); 132(1)(b)

Judgement Text

"Neutral Citation No. - 2025:AHC:60821 Court No. - 77 Case :- CRIMINAL MISC. BAIL APPLICATION No. - 47559 of 2024 Applicant :- Ankur Garg Opposite Party :- Union of India Counsel for Applicant :- Ayank Mishra Counsel for Opposite Party :- Parv Agarwal Hon'ble Manoj Bajaj,J. Applicant- Ankur Garg has filed this application under Section 439 Cr.P.C. for grant of regular bail, during the pendency of trial in Case No.1323 of 2024, under Sections 132(1)(b), 132(1)(c), 132(1)(i) of Central Goods and Services Tax Act, 2017 (In short as \"CGST Act, 2017\"), DGGI, Ghaziabad Regional Unit, Ghaziabad. The applicant is in custody since his arrest on 19.11.2024. In brief, the facts leading to the bail application are that a complaint dated 15.01.2025 was filed by Director General of GST Intelligence (DGGI), Zonal Unit, Meerut through Shri Manish Chaudhary, Senior Intelligence Officer, DGGI, Regional Unit, Ghaziabad against the applicant- Ankur Garg wherein it is alleged that an intelligence input revealed involvement of M/s Aadya Trading Company (o6ATUPA2215J1ZS) in availing ineligible Input Tax Credit on the basis of invoices issued by non-existent firms, and without receipt of concomitant goods the fake Input Tax Credit was further passed on to various buyers. Relying upon the information, search was conducted at the place of business of M/s Aadya Trading Company as well as the residence of proprietor- Ghanshyam Aggarwal. Also, the searches were conducted at the place of business of M/s J.L. Autoparts Pvt. Ltd., M/s A D Precision Forgings Pvt. Ltd and M/s Mahavar Steels as well as the residences of Jayant Sehgal and Satyapal Gupta, Director of beneficiary companies and Proprietor, M/s Mahavar Steels, respectively. The residential premises of applicant-Ankur Garg was also searched and incriminating document/records gathered indicated the involvement of M/s Aadya Trading Company in commission of the crime. The statements of other employees of the firms were also recorded and they all stated about the involvement of Ankur Garg in commission of the crime. As per the complaint, in all 21 fake firms had issued invoices to M/s Aadya Trading Company and the details of said firms are mentioned in para-3 of the complaint/ charge-sheet dated 15.01.2025. During investigation, notices were issued to the 21 firms, but no response was received on their behalf as they were non-existent. The statement of Ghanshyam Aggarwal was also recorded under Section 70 CGST Act, 2017 who feigned ignorance about the activities of the firm M/s Aadya Trading Company, and disclosed that Ankur Garg being his relative had been filing his income tax returns, and he was involved in creating the firm in his name. As per the consolidated quantification a sum of Rs.36,92,54,801.35/- was availed and utilized as fake Input Tax Credit through the non- existent firms by M/s Aadya Trading company between January 2023 to September 2024. The complaint also contains the financial verification, analysis of fake supplier firms, transportation of goods as well as E-way bills etc. and prays for taking cognizance of above mentioned offences for the purpose of his prosecution and punishment. A copy of the complaint/ chargesheet dated 15.01.2025 is appended at S.A.1 to the supplementary affidavit. The accused applicant had applied for regular bail before the Additional District & Sessions Judge, Court No.04, Meerut, but the said concession was rejected vide order dated 11.12.2024. Hence, this application. Pursuant to the advance notice, Mr. Parv Agarwal, learned counsel for the Union of India-opposite party appeared, who filed counter affidavit dated 04.03.2025 and additional counter affidavit dated 15.04.2025. Learned Senior Counsel for the applicant has argued that according to the allegations in the complaint itself, the ineligible Input Tax Credit was availed by M/s Aadya Trading Company and was passed on to three beneficiary companies, but there is no document collected during investigation to connect the applicant with the firm namely M/s Aadya Trading Company. According to learned counsel, one Ghanshyam Aggarwal is proprietor of the said firm who had passed on fake Input Tax Credit to three beneficiaries namely M/s J.L. Autoparts Pvt. Ltd., M/s A D Precision Forgings Pvt. Ltd and M/s Mahavar Steels and existence of all of them is established but none of them has been made an accused in the complaint. Learned counsel has further argued that the 21 different firms which had issued fake invoices to M/s Aadya Trading Company are not at all connected to the applicant in any manner and it is not the case of the prosecution that these fake firms were created by the applicant. He submits that the investigation in the case is complete and applicant is still confined in judicial custody. He prays for bail. The prayer is opposed by Mr. Parv Agarwal, learned Counsel for the Union of India-opposite party who has argued that the firm M/s Aadya Trading Company, though is a proprietorship firm of Mr. Ghanshyam Aggarwal, but the said proprietor in his statement recorded under Section 70 CGST Act, 2017 has clearly narrated about the role of applicant in commission of the crime, who has been cited as a prosecution witness. Similarly, according to Mr. Parv Agarwal, the Director of the beneficiary companies is also a prosecution witness and coupled with the statements of the other employees of these firms as well as the statement of applicant- Ankur Garg recorded under Section 70 CGST Act, 2017, it is apparent that ample evidence has been collected against the applicant-accused. He submits that the applicant himself accepted his involvement in the crime, therefore, it cannot be said that the accused has been falsely implicated. While referring to the complaint/charge-sheet, Mr. Parv Agarwal, learned Counsel has pointed that the consolidated amount of fake Input Tax Credit and utilized goods amounts to more than Rs.36 crores, therefore, keeping in view of the gravity of the offence, the applicant does not deserve the concession of regular bail. However, it is not disputed by Mr. Parv Agarwal, learned Counsel that the complaint/charge-sheet dated 15.01.2025 stands filed, but the charges against the applicant have not been framed so far. After hearing the learned counsel for the parties and considering their submissions, this Court finds that the prosecution case is primarily based upon the documentary evidence relating to alleged involvement of M/s Aadya Trading Company in availing ineligible Input Tax Credit and further passing it on to three other beneficiary firms noticed above. During the course of hearing, it is fairly stated by Mr. Parv Agarwal, learned Counsel that as per records of M/s. Aadya Trading Company, Ghanshyam Aggarwal is the proprietor of the said firm, but according to him, the applicant is the person who is actually managing the affairs of the said firm. Learned counsel for the opposite party has also not disputed this fact that the applicant is at least not involved in creation of the alleged 21 non-existent firms, which were utilized for availment and further passing on ineligible Input Tax Credit. As far as the statement of applicant recorded under Section 70 CGST Act 2017, is concerned, its admissibility or evidentiary value would be tested during trial. A perusal of the zimni orders passed by the trial court would show that after filing of the charge-sheet in January, 2025, the case is being adjourned for recording pre-charge evidence and no witness has been examined so far by the prosecution. Thus, it is evident that the trial has not yet started. Admittedly, the alleged offences are triable by Magistrate and provide for a maximum punishment of five years imprisonment, and trial is likely to consume considerable time to conclude, therefore, this Court has no hesitation in holding that the further detention of the applicant behind the bars would not serve any useful purpose, who has already spent more than five months in judicial custody since his arrest on 19.11.2024. Further, the prosecution witnesses are official witnesses and presently there does not appear to be any possibility of their being won over, therefore, considering the nature of the trial as well as period of more than five months undergone by the applicant as an undertrial, this Court deems it appropriate to extend the concession of regular bail to the applicant. Resultantly, without meaning any expression of opinion on the merits of the case, the bail application is allowed, and it is ordered that the applicant- Ankur Garg be released on regular bail in the above case subject to his furnishing the requisite bail bonds and surety bonds to the satisfaction of the trial court. It is further directed that the accused-applicant shall also abide by the terms and conditions of bail, which shall be imposed by the trial court at the time of acceptance of their bail bonds and surety bonds. Order Date :- 22.4.2025 Shiv Digitally signed by :- SHIV KUMAR SHARMA High Court of Judicature at Allahabad "