₹55 Crore Service Tax Evasion a ‘Serious Economic Offence’: Punjab & Haryana HC Denies Bail to Director [Read Order]

The Punjab & Haryana High Court refused to grant bail to an accused holding that the alleged ₹55 crore service tax evasion forms a serious economic offence affecting the economy of the country.

DGGI (Directorate General of GST Intelligence) conducted investigation in the company of Radhey Shyam, the petitioner of this case. The petitioner, with another, faced prosecution under Central Excise Act, 1944 and the Finance Act, 1994, read with Section174 of the CGST Act.

The GST intelligence found that the company was engaged in multi-level direct marketing and had collected nearly ₹29,59 crore from lakhs of direct sellers towards membership fees, joining charges and access to its business platform, categorised as “business support services”, without discharging the applicable service tax liability.

The department said that service tax of about ₹54.77 crore for the period October 2016 to June 2017 was deliberately evaded. The company did not obtain mandatory service tax registration.

It also did not file the returns and it suppressed material facts, said the department. The demand was confirmed and penalties were imposed.

The petitioners, later surrendered in November 2025 and sought bail, contending that the case was document-based, custodial interrogation was unnecessary, and that most offences were bailable.

According to the petitioners, their interrogation is not necessary and their arrest is illegal. It cited Satender Kumar Antil’s case decided by the Supreme court.

The petitioner did not even participate in the adjudication proceedings, said the department.

It was argued that the ratio of Satender Kumar Antil's case does not apply and the petitioners cannot claim any benefits under category A because they have committed serious economic offenses, their statutory liability is in the crores of rupees and involves public revenue, and they have long evaded the process. It is therefore suggested that the petition should not be granted.

The high court rejected the submissions of the petitioner and rejected the bail. It noted that the petitioners were involved in 49 FIRs which have been registered against them in different parts of the country for allegedly defrauding public persons.

‘The act of evasion of tax about Rs. 55 crores amounts to commission of a serious economic offence constituting fraud on the economy of the country itself. These offences are to be considered as a class apart’ observed the court.

Justice Manisha Batra, considering the gravity of allegations, said that the act of delaying joining of proceedings in the matter since the year 2018. Therefore, the court said that the bail should not be granted to the petitioner.

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