Rs. 100 Crore GST Fraud: Karnataka HC Grants Interim Bail to Employees to Approach Chennai Court Read Order]

The Karnataka High Court granted interim bail to employees related to Rs 100 Crore GST Fraud and directed them to approach Chennai court. The court stated that in circumstances of big scale tax evasion, even if an accused is granted transit anticipatory bail so that he can access the jurisdictional court, ends of justice will be fulfilled if the court is satisfied that rigorous terms are set to meet the flight risks.

Justice S Vishwajith Shetty, Single Judge Bench, made the decision while hearing a batch of six criminal petitions filed by persons connected with M/s. Attica Gold Pvt. Ltd., apprehending arrest by the Directorate General of GSTIntelligence (DGGI), Chennai Zonal Unit.

The petitioners moved a plea before the High Court for grant of transit anticipatory bail for a term of eight weeks. They are before proceedings under Section 132(1)(a) read with Section 132(1)(i) of the CGST Act, 2017. It is said that the accused persons were involved in the business of buying old and used gold and silver jewellery from walk-in consumers at numerous branches across South India hence dodging GST income to the tune of more than Rs. 100 Crores.

During the course of investigation by the DGGI, various raids were undertaken at the business premises of the petitioners at Bengaluru and other places resulting in seizure of key documents. The petitioners, apprehending their arrest, went to the Karnataka High Court before they could reach the jurisdictional Court at Chennai to lodge a standard anticipatory bail plea.

The answering counsel appearing for DGGI has fought the petitions fiercely. It was argued that the interim bail would make the accused a serious flight risk and that he would abscond from court. However, the lawyer accepted that the Court could attach suitable conditions to address this problem.

The High Court referred to the landmark judgement of the Supreme Court in the case of Priya Indoria v. State of Karnataka (2024) 4 SCC 749 wherein the scope and power of the courts to grant interim anticipatory bail were elaborately dealt with. The High Court held that limited relief could be granted without expressing any opinion on the merits of the massive tax fraud case.

The Court observed that the ends of justice will be met if the petitioners are given a fair time to approach the competent court in Chennai.

Accordingly, the Court has admitted the petitions and granted interim anticipatory bail to all the six petitioners for a limited time of 10 days from the date of receipt of the judgement. The Court established tight measures to address the flight risk raised by the DGGI.

The Court ordered that in the case of the arrest of the petitioners they shall be released on executing a personal bond of Rs. 1,00,000 with two sureties for the same sum. The petitioners were also asked to fully cooperate with the inquiry and to surrender their passports to the DGGI, subject to any subsequent directions granted by the jurisdictional court in Chennai.