Allahabad High Court Releases Ashish Kakkar on Bail Amidst Allegations of Forged GST Forms and Illegitimate ITC, Citing Ambiguous Arrest Memo [Read Order]

The Allahabad High Court has granted bail to Ashish Kakkar, who was arrested in a GST Fraud case on charges of creating 92 fake GST Forms and passing off illegitimate Input Tax Credit (ITC) amounting to a staggering Rs. 88 crores citing ambiguity and lack of clarity in the arrest memo issued against him.

The decision came in response to a writ petition filed by the accused challenging the constitutionality of Section 69 of the Central Goods and Service Tax (CGST) Act, 2017.

The petitioner, Ashish Kakkar was represented by Sri Vikram Chaudhary, Sri Pranjal Krishna and Sri Raghav Dev Garg.

The respondents were the Union of India, represented by Sri Shashi Prakash Singh and Sri Gopal Verma and Respondent No. 2 was represented by Sri Dhananjay Awasthi and Sri Lakshya Kumar Singh.

The writ petition was filed with the contention that Section 69 of the CGST Act, 2017 was arbitrary and violated Articles 14 and 21 of the Constitution of India.

Furthermore, the petitioner also prayed for quashing his alleged illegal arrest under the said provision as being illegal and unconstitutional.

The Petitioner argued that the Department of Goods and Services Tax Intelligence (DGGI) violated the provisions laid down by the Supreme Court in the cases of Arnesh Kumar vs. State of Bihar and Satendra Kumar Antil vs. CBI.

The petitioner’s plea asserted that the Department failed to show ‘necessity to arrest’ as required by Section 41(1) of the Code of Criminal Procedure (CrPC) in the arrest memo.

According to the petitioner’s version of events, on June 26, 2023, DGGI officers conducted a search at his residence in Greater Kailash, New Delhi. After interrogation and the conclusion of the search, he was taken to different DGGI offices.

The petitioner alleged that he was forced to record a confession and was compelled to sign it.

Subsequently, on June 27, 2023, he was arrested based on an order passed by the Principal Commissioner/Commissioner, alleging that he committed offenses under multiple clauses of Section 132(1) of the CGST Act.

The bench noted that the arrest memo referred to various clauses of Section 132(1) without specifying the exact offense, indicating the Department’s uncertainty regarding the charges.

The bench also observed that the Department did not seek further custodial interrogation after obtaining judicial remand, suggesting that they were satisfied with the interrogation conducted until that point.

In light of the rulings of the Supreme Court and the Bombay High Court in Daulat Samirmal Mehta vs. Union of India, the Allahabad High Court held that the necessity to arrest and compliance with Section 41(1) of CrPC must be adhered to in every arrest under the CGST Act.

The court also referenced the judgment in Satendra Kumar Antil, which emphasised the importance of investigating agencies and courts complying with CrPC provisions regarding bail.

The division bench comprising Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava granted bail to Ashish Kakkar, subject to conditions, including a personal bond of Rs. 1 crore and two sureties of the same amount and clarified that the petitioner's release on bail does not hinder the ongoing investigation.

The petitioner was also directed to cooperate with the investigation and adhere to other conditions to ensure his presence during proceedings.

In conclusion, the Allahabad High Court highlighted the importance of upholding procedural safeguards in arrests made under the CGST Act and also emphasised the need for clarity and compliance with statutory provisions while arresting an individual protecting individual liberties.

To Read the full text of the Order CLICK HERE

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