Orissa HC Grants bail to GST Fraud Accused on Rs. 50L Bond citing Stage of Possibility of Influencing Witness Over [Read Order]

In a recent ruling, the Orissa High Court has granted bail to an accused in a high-profile Input Tax Credit ( ITC ) fraud case under the Odisha Goods and Services Tax ( OGST ) Act, 2017. The Court, while granting relief, stated that the critical stage of investigation where the possibility of tampering with evidence or influencing witnesses exists appeared to have concluded.

The petitioner, Gurdit Dang, was arrested in July 2021 for allegedly masterminding, in collusion with co-accused individuals, the creation and operation of multiple fictitious business entities. These entities reportedly issued fake GST invoices without actual movement of goods, thereby enabling the wrongful availing and passing on of bogus ITC. The fraud was discovered during the investigation by the CT & GST Enforcement Unit, Rourkela.

While opposing the bail, the State counsel contended that the petitioner played an active and central role in the conspiracy to defraud the exchequer, including opening fake bank accounts and generating non-existent transactions. The prosecution asserted that if released, the accused allegedly an influential person might tamper with witnesses, erase the money trail, or intimidate other actors involved in the scheme.

However, the defense argued that the petitioner had already spent over four months in custody and that all relevant documents, electronic data, and materials had been seized by the authorities, thereby eliminating any realistic threat of tampering with evidence. It was further contended that the case was primarily based on documentary evidence and that assessment proceedings under the GST law would eventually determine the quantum of liability.

Justice D.Dash, after reviewing the submissions and applying settled legal principles laid down by the Supreme Court in several rulings including P. Chidambaram v. CBI and Kalyan Chandra Sarkar v. Rajesh Ranjan noted that continued detention was no longer necessary, particularly in the absence of any material indicating the petitioner’s attempt to flee, tamper evidence, or influence witnesses.

The Court reasoned that while the allegations were serious in nature and involved economic offences, the stage of investigation where the presence of the accused might derail proceedings or impact witnesses had clearly passed.

The bench, noting that the accused was a permanent resident of Rourkela and that extensive searches and document seizures had already taken place, the Court concluded that bail could be considered with strict conditions to ensure fairness.

Accordingly, the High Court granted bail to the petitioner upon furnishing a personal bond of ₹50,00,000 along with two sureties of the same amount. The conditions included non-indulgence in similar offences, surrender of passport (or affidavit in case of non-possession), non-interference with witnesses, and regular appearance before authorities as required. The Court expressly warned that violation of any of the conditions would lead to automatic cancellation of bail.

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