Facts of the Case

Petitioner Rishabh Jain was arrested on 25.06.2023 in connection with an investigation by the Directorate General of GST Intelligence (DGGI), Jaipur Zonal Unit, registered vide File No. DGGI/INT/INTL/GST/828/2023-Gr.E, alleging offences under Sections 132(1)(b)(c)(f)(k) of the Central Goods and Services Tax Act, 2017. The prosecution alleged that the petitioner, along with another person bearing the same name, operated a syndicate of 569 non-existent fake firms used solely to issue fake invoices without any actual supply of goods or services, causing GST evasion to the tune of Rs. 1046.74 Crores. The petitioner claimed his confessional statement was recorded under duress and later retracted it. Investigation stood completed and a charge-sheet was filed against him. He approached the Rajasthan High Court, Bench at Jaipur, under Section 439 Cr.P.C., seeking regular bail after nearly six months in judicial custody.

Issues Involved

  1. Whether the petitioner, alleged to be a key operator of a large-scale GST evasion racket involving fake firms and fictitious invoicing, was entitled to regular bail under Section 439 Cr.P.C.
  2. Whether prolonged incarceration, a completed investigation, filing of the charge-sheet, absence of antecedents, and the maximum prescribed punishment of five years justified release on bail, notwithstanding the enormous scale of the alleged evasion and without prejudging the merits of the accusation.

Petitioner's Arguments

  • Petitioner was wrongly implicated; his confessional statement, recorded under duress and coercion while in custody from 25.06.2023, was subsequently retracted by him.
  • Investigation stood completed and the charge-sheet already filed, so continued custody served no further investigative purpose.
  • Maximum punishment prescribed for the alleged offence under Section 132(1) of the CGST Act, 2017 is five years' imprisonment with fine, and petitioner had no criminal antecedents.
  • Considering the period already undergone in custody and the totality of facts and circumstances, bail ought to be granted.
  • Reliance was placed on Ratnambar Kaushik v. Union of India [2022 SCC OnLine SC 1678], where the Supreme Court granted bail in a comparable GST-evasion prosecution after four months' incarceration, noting the evidence was essentially documentary and electronic in nature, ruling out any real apprehension of tampering or influencing witnesses.

Respondent's Arguments

  • State and Union of India (DGGI) opposed the bail application, arguing that the petitioner, together with another person of the same name, operated a syndicate of 569 fake, non-existent firms.
  • These firms existed only on paper and were used exclusively to issue fake invoices without any actual supply of goods or services.
  • The quantum of GST evasion attributable to the petitioner was to the tune of Rs. 1046.74 Crores, which respondents argued warranted his continued custody.

Court Order/Findings

  • The Court noted petitioner was arrested on 25.06.2023, investigation stood completed, charge-sheet filed, and he had no antecedents; maximum punishment under Section 132(1) of the CGST Act, 2017 is five years plus fine.
  • It relied on Ratnambar Kaushik (supra), where the Supreme Court granted bail on comparable facts after four months' custody, given that documentary/electronic evidence reduces tampering risk and conclusion of trial would in any event take considerable time.
  • Considering the roughly six-month period of incarceration, the completed investigation, absence of antecedents, and the statutory punishment ceiling, and without commenting on the merits of the case, the Court held it just and proper to release the petitioner on bail.
  • Bail was allowed on furnishing a personal bond of Rs. 2,00,000/- with two sureties of Rs. 1,00,000/- each, subject to conditions of appearance before the trial court, no inducement or threat to witnesses, and no departure from India without prior court permission.

Important Clarification

  • The order clarifies that bail was granted purely on well-settled parameters, namely the period of custody, completed investigation, filed charge-sheet, absence of antecedents, and the statutory punishment ceiling, and not on any assessment of the truth or falsity of the underlying fake-invoicing or GST-evasion allegations.
  • Even where alleged tax evasion is very large in scale, as here (Rs. 1046.74 Crores through an alleged syndicate of fake firms), bail can still follow once investigation is complete and the accused has undergone substantial incarceration, since evidence in such GST-evasion cases is predominantly documentary and electronic, limiting any real risk of tampering with evidence or witnesses.

Sections Involved

  • Section 439, Code of Criminal Procedure, 1973 — empowers the High Court and Court of Session to grant bail to a person in custody, and to impose conditions on such release.
  • Section 132(1)(b)(c)(f)(k), Central Goods and Services Tax Act, 2017 — penal provision criminalising issuance of invoices without actual supply of goods or services, and availing/utilising input tax credit using such fake invoices, punishable up to five years' imprisonment with fine depending on the amount of tax evaded.

Decision – In Favour of

This order is in favour of the Petitioner. The Rajasthan High Court allowed the bail application and granted regular bail to Rishabh Jain under Section 439 Cr.P.C., subject to a personal bond, sureties, and specified conditions, while expressly clarifying that the grant of bail was made without commenting on the merits of the underlying GST-evasion allegations against him.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Judicature for Rajasthan, Bench at Jaipur
  • Case No.: S.B. Criminal Miscellaneous Bail Application No. 10718/2023
  • CNR: Not available
  • Coram: Hon'ble Mr. Justice Sudesh Bansal
  • Decision Date: 04.12.2023
  • Disposal Nature: Bail application allowed; petitioner released on bail subject to conditions

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