Deepanshu Srivastava v. Union of India through Department of Revenue, DGGI Lucknow Zonal Unit

Case snapshot

Sections / provisions: GST statutory provision - Section 6; GST statutory provision - Section 11; GST statutory provision - Section 25; GST statutory provision - Section 41; GST statutory provision - Section 41A; GST statutory provision - Section 41A(1); GST statutory provision - Section 41A(3); GST statutory provision - Section 59; GST statutory provision - Section 60; GST statutory provision - Section 61; GST statutory provision - Section 62; GST statutory provision - Section 63

Questions before the Court / Tribunal

• Issue and context: In rebuttal, learned Senior Counsel appearing for the applicant has drawn the attention of this Court towards Section 69 of the Central Goods and Services Act and submits that custody remand of the applicant has not been sought at the time of remand of accused by the department and also that the cooperation in the investigation doesn't mean that applicant should confess his guilt as proposed by the department and it should be taken as enough cooperation if the applicant had appeared before the investigating officer in response to the summons issued to him and the applicant in this case has remained present before the investigating officer as and when he was summoned and ultimately arrested illegally. It is again reiterated that the offences is punishable with upto 05 years' of imprisonment and keeping in view the fact that still no assessment of tax has been…
• Which factual, statutory and procedural conditions controlled the requested relief?
• How did the forum apply the governing provisions to the evidence and procedural history recorded in this case?

Material facts and procedural background

6. It is also submitted that the applicant was detained in illegal custody for three days from 30.01.2024 till 02.02.2024 by the department and thereafter he has been challaned. 7. It is further submitted that no notice has either been given under Section 74 of the G.S.T. Act and when the applicant was presented before the remand court, the offences were shown as bailable but subsequently without there being any basis many other companies have been shown to be associated with the applicant as shell companies with which the applicant is not having any connection or concern. 8. While drawing the attention of this Court towards the 'panchnama/recovery-memo', with regard to Shalimar Mannat, Barabanki, it is stated that the recovery, as shown by the department from this house is not having any significance in the eye of law as the same has not been made in presence of the applicant and no signature of applicant has been obtained on this recovery-memo and, thus, the same is barred by Section 100 of the Cr.P.C.

Union of India', a single Judge judgment of this Court of date 10.07.2023 passed in Criminal Misc. Bail Application No. 26376 of 2023 (Ravindra Nath Sharma @ Ravubder Sharma vs. Union of India). 13. Shri Dipak Seth, learned counsel appearing on behalf of Union of India vehemently opposes the prayer of bail of the applicant on the ground that the submission, which has been raised before this Court with regard to the fact that in absence of any tax liability, the criminal prosecution is not permissible, is not an argument which may have the support of the law as in all tax matters prosecution and adjudication are

In this regard, the law laid down by the Hon'ble Supreme Court vide order dated 07.11.2023 passed in Criminal Appeal No. Nil of 2023, arising out of S.L.P . (Crl.) No. 10810 of 2023, 'The State of Jharkhand vs. Dhananjay Gupta @ Dhananjay Prasad Gupta' has been highlighted, wherein it is opined that at any rate mere claim of innocence or undertaking to participate in the trial or absence of specific allegation cannot be assigned as reasons for grant of bail in case of offences of serious nature. It is requested that having regard to the magnitude of the crime wherein the State has been inflicted loss of crores of rupees of input tax, the applicant is not entitled to be released on bail.

It is again reiterated that the offences is punishable with upto 05 years' of imprisonment and keeping in view the fact that

still no assessment of tax has been calculated and no formal complaint or F.I.R. has been lodged, applicant is entitled for bail. 22. Having heard learned counsel for the parties and having perused the record, the case of the prosecution, as is emerging from the record is to the tune that the Director General of G.S.T. Intelligence, Lucknow Zonal Unit is investigating a case of fraudulent availment and passing of input tax credit of G.S.T, by preparing fake invoices without any actual supply of goods by several firms created, managed and run by the applicant and it is found that the applicant has created a number of bogus firms for the purpose of issuing fake invoices to facilitate their clients in availing and utilizing fake input tax credit and allegations are to the tune that applicant is the master mind of the entire racket and input tax credit of high magnitude has been obtained without supplying of any goods.

Appellant / petitioner / assessee submissions

The judgment does not separately label this side’s submissions in an independently extractable passage. No contention is inferred; read the full record.

Revenue / respondent submissions

122.99 crores. 25. Learned Senior counsel appearing for applicant vehemently submits that without adopting the procedure, as provided under Section 74 of the CGST Act, no further proceedings including the arrest of the applicant may be undertaken and also that the alleged offences are punishable with upto 05 years of imprisonment. Reliance has also been placed on the law laid down by the Hon'ble Supreme Court in Satender Kumar Antil Vs. Central Bureau of Investigation and others : (2021) 10 SCC 773, while learned counsel appearing for the Department has placed reliance on the law laid down by the Hon'ble Supreme Court in Radheyshyam Kejriwal (supra) in order to show that the proceedings of prosecution and adjudication may go on simultaneously, it is vehemently submitted by learned counsel appearing for Union of India that it is not a case of paying less tax or any discrepancy in the payment of tax rather it is a case where without supplying any goods the input tax credit has been illegally taken and misappropriated.

26. Learned Senior counsel appearing for the applicant has drawn the attention of this Court towards the memo of arrest of the applicant in order to show that no ground of arrest has been mentioned therein while learned counsel appearing for the Department has drawn the attention of

proceedings' in respect of the said notice emerging under Sub-section 11 shall not include proceedings under Section 132 of the 'Act'. Thus, it may be inferred that even if all the tax liability including penalty, etc. has been deposited, it would be only the 'notice' which would be discharged and the proceedings with regard to Section 132 of the CGST Act shall remain alive. Thus, there seems force in the submissions made by learned counsel for the Department that the process of prosecution and assessment may go on simultaneously. 30. In P .V . Ramana Reddy and Ors. vs. Union of India and Ors., MANU/TL/0064/2019, which has also been approved by the Hon'ble Supreme Court vide order dated 27.05.2019 passed in Special Leave Petition (Crl.) No.

Court / Tribunal analysis and reasoning

Union of India and another) , 'Paras Jain @ Rohan Jain vs. Union of India' and in Ravindra Nath Sharma @ Ravubder Sharma (supra), submits that the law leans in favour of bail and when the offence is punishable with upto five years' of imprisonment, the further detention of the applicant would be a futile exercise. 28. Learned counsel appearing for Union of India, however, relied on Y.S. Jagan Mohan Reddy (supra) and Nimmagadda Prasad (supra) in order to show that the economic offences are of a class of their own and, therefore, are to be dealt with differently and applicant is not entitled for bail. 29. Perusal of the provisions contained under Section 73 and 74 of the CGST Act would reveal that a mechanism has been provided therein with regard to the determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilfull mis-statement or suppression of facts.

4430 of 2019 and also in The State of Gujarat Vs. Choodamani Parmeshwaran Iyer and Ors., MANU/SC/0992/2023, a Division Bench of Telangana High Court repelled the similar contention raised by an accused in following words;- "50. The contention of the petitioners is that the CGST Act, 2017 prescribes a procedure for assessment even in cases where the information furnished in the returns is found to have discrepancies and that unless a summary assessment or special audit is conducted determining the liability, no offence can be made out under the Act. Therefore, it is their contention that even a prosecution cannot be launched without an assessment and that therefore, there is no question of any arrest.

of CGST Act, 2017 have no co-relation to assessment. Issue of invoices or bills without supply of goods and the availing of ITC by using such invoices or bills, are made offences under clauses (b) and (c) of subSection (1) of Section 132 of the CGST Act. The prosecutions for these offences do not depend upon the completion of assessment. Therefore, the argument that there cannot be an arrest even before adjudication or assessment, does not appeal to us." Thus, there appears no substance in the submissions raised by learned senior counsel appearing for the applicant that before proceeding under 74 of the Act the applicant should not have been arrested or prosecuted.

the said section, he may by order authorize any officer of central tax to arrest such person. Therefore, what sub-section (1) provides is that Commissioner may by order authorize any officer of the department to arrest a person if he has reasons to believe that the said person has committed any offence under clauses (a) or (b) or (c) or (d) of subsection (1) of section 132. The expression 'reasons to believe' as appearing in subsection (1) of section 69 is of crucial importance because the same is the sine qua non for exercise of power to arrest by the Commissioner. It is also to be highlighted that under sub-section (3) of section 69, arrest under sub-section (1) has been made subject to the provisions of Cr.P.C., which would include section 41 and 41-A thereof.

If a person commits the above two offences as per clauses (c) and (b), he shall be punishable under clause (i) if the amount of tax evaded or the amount of input tax credit wrongly availed of or utilized or the amount of refund wrongly taken exceeds five hundred lakh rupees with imprisonment for a term which may extend to five years and with fine. All other penalties are below five years. Therefore, the maximum penalty that can be imposed for committing offences under clauses (c) and (b) of sub-section (1) of section 132 is imprisonment for a term which may extend to five years and with fine.As per sub-section (5), the offences specified in clause (a) or (b) or (c) or (d) of sub-section (1) are

Therefore, the custodial interrogation of petitioner/accused is required in the present case for thorough investigation.” 34. We cannot treat the behavior attributed to the appellant to be instances of non-cooperation justifying dismissal of his appeal for prearrest bail. An accused, while joining investigation as a condition for remaining enlarged on bail, is not expected to make self-incriminating statements under the threat that the State shall seek withdrawal of such interim protection." 35. Thus the cooperation in the investigation may not be taken that accused applicant while under interrogation must make statements in favour of the department or make statements which are self incriminatory. 36. In order to canvass the necessity of the further detention of the applicant in prison the Department has relied on the statements of the applicant in order to show that there is clear admission on the part of the

Operative decision and relief

21. In rebuttal, learned Senior Counsel appearing for the applicant has drawn the attention of this Court towards Section 69 of the Central Goods and Services Act and submits that custody remand of the applicant has not been sought at the time of remand of accused by the department and also that the cooperation in the investigation doesn't mean that applicant should confess his guilt as proposed by the department and it should be taken as enough cooperation if the applicant had appeared before the investigating officer in response to the summons issued to him and the applicant in this case has remained present before the investigating officer as and when he was summoned and ultimately arrested illegally.

punishable under clause (i) of that section are cognizable and nonbailable. 32. Reverting to the facts of the present case, it appears to be not disputed that summons were issued to the petitioner under section 70 of the CGST Act and responding to the summons, applicant had appeared before the investigating officer where after his statements were recorded on 31.01.2024,01.02.2024 and on 02.02.2024. I have perused the statements of the applicant which have been produced with the counter affidavit filed by Union Of India. It may also be noticed that on 02.02.2024 the applicant was arrested and produced before the Magistrate on 03.02.2024 and no custody remand was requested by union of India and the applicant was remanded to judicial custody for 14 days.

It is admitted in para no. 17 of the counter affidavit filed by the respondent that the custody remand of the applicant was not sought as the same was not required. It is also evident that thereafter permission was taken by the department for further interrogation of the applicant in jail on 23.02.2024 and the applicant was further interrogated in jail on 26.02.2024. It is not evident as to why the applicant was not interrogated prior to 26.02.2024 when his statements have already been recorded on three days when he had appeared before the department and when according to the department he was not cooperating why his custody remand was not sought.

Therefore, their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI." 44. Thus, keeping in view the fact that applicant has appeared before the department on 30, 31 January 2024 and on 01st February and his statements have been recorded on these days and he was arrested on 2nd February, 2024 and produced before the magistrate and no custody remand was sought by the department and it was after many days i.e. on 26.02.2024 the department has taken the permission from the Court concerned for interrogation of the applicant in jail and also that applicant has retracted his confessional statements and in the orders of arrest no reason has been mentioned as to why after recording of the statements of the applicant for many days his arrest is required and also keeping view that applicant is in jail in this case since 02.02.2024 and investigation appears to have reached an advanced statge and nothing has been shown before this Court which mey justify the further detention of the applicant in prison and also considering that the alleged offence is punishable with up to 5 years maximum punishment and still no formal accusation in the form of FIR or complaint has been filed by the department and also keeping in view that in such circumstances continuing the detention of the petitioner may not at all be justified and it appears justified for this court to strike a fine balance between the need for further detention of the applicant when even custodial interrogation has not been claimed at all by the Department and considering the right of an accused to personal liberty, applicant may be released on bail, however subject to certain conditions.

Ratio and legal principle

The narrow proposition associated with Deepanshu Srivastava v. Union of India through Department of Revenue, DGGI Lucknow Zonal Unit concerns issue and context: in rebuttal, learned senior counsel appearing for the applicant has drawn the attention of this court towards section 69 of the central goods and services act and submits that custody remand of the applicant has not been sought at the time of remand of accused by the department and also that the cooperation in the investigation doesn't mean that applicant should confess his guilt as proposed by the department and it should be taken as enough cooperation if the applicant had appeared before the investigating officer in response to the summons issued to him and the applicant in this case has remained present before the investigating officer as and when he was summoned and ultimately arrested illegally. it is again reiterated that the offences is punishable with upto 05 years' of imprisonment and keeping in view the fact that still no assessment of tax has been… The proposition cannot be separated from the judgment’s facts, the governing statutory version, the forum’s jurisdiction, and the exact relief recorded in Case :- CRIMINAL MISC. BAIL APPLICATION No. - 2391 of 2024.

For working-paper purposes, the decision should be cited only after matching the material facts and reading the passages under the judgment-grounded record above. The editorial outcome label “Remanded / fresh adjudication” is a navigation aid; it does not replace the operative order or explain every issue in a multi-issue case.

Why this judgment matters

This decision is relevant when a file raises the same central question identified in the source headnote: Issue and context: In rebuttal, learned Senior Counsel appearing for the applicant has drawn the attention of this Court towards Section 69 of the Central Goods and Services Act and submits that custody remand of the applicant has not been sought at the time of remand of accused by the department and also that the cooperation in the investigation doesn't mean that applicant should confess his guilt as proposed by the department and it should be taken as enough cooperation if the applicant had appeared before the investigating officer in response to the summons issued to him and the applicant in this case has remained present before the investigating officer as and when he was summoned and ultimately arrested illegally. It is again reiterated that the offences is punishable with upto 05 years' of imprisonment and keeping in view the fact that still no assessment of tax has been… Its practical value lies in the way the Allahabad High Court connected the governing provisions—GST statutory provision - Section 6; GST statutory provision - Section 11; GST statutory provision - Section 25; GST statutory provision - Section 41; GST statutory provision - Section 41A; GST statutory provision - Section 41A(1); GST statutory provision - Section 41A(3); GST statutory provision - Section 59; GST statutory provision - Section 60; GST statutory provision - Section 61; GST statutory provision - Section 62; GST statutory provision - Section 63—to the procedural posture and evidence before it.

The authority level is High Court. That affects persuasive or binding weight, but authority level alone is never enough. Territorial jurisdiction, statutory period, the identity of the challenged order, and later appellate treatment must all be checked before the case is used in advice, a submission, or litigation strategy.

Practitioner action points

• Begin with the complete judgment and mark the paragraphs supporting the exact proposition relied upon.
• Match the statutory version of GST statutory provision - Section 6; GST statutory provision - Section 11; GST statutory provision - Section 25; GST statutory provision - Section 41; GST statutory provision - Section 41A; GST statutory provision - Section 41A(1); GST statutory provision - Section 41A(3); GST statutory provision - Section 59; GST statutory provision - Section 60; GST statutory provision - Section 61; GST statutory provision - Section 62; GST statutory provision - Section 63 and the decision date 2024-03-19; do not assume the current text is identical.
• Compare the notice, assessment, appeal or other procedural sequence with the chronology recorded in this case.
• Verify the stated later-history status and any review, appeal, SLP, curative or rectification proceedings before citation.
• Record why the client’s evidence is materially similar, and also record any fact capable of distinguishing the result.

Does this case match your facts?

Detailed reliance and distinction analysis

Identity check. Confirm that the cited cause title is Deepanshu Srivastava v. Union of India through Department of Revenue, DGGI Lucknow Zonal Unit, the proceeding is Case :- CRIMINAL MISC. BAIL APPLICATION No. - 2391 of 2024, and the decision is dated 2024-03-19. These fields are taken from the judgment record and should appear exactly in the citation note.

Bench check. The judgment identifies the coram as Mohd. Faiz Alam Khan,J.. A later order by another bench, a larger bench, or a higher forum may alter the weight or interpretation of the proposition.

Provision check. The source associates the dispute with GST statutory provision - Section 6; GST statutory provision - Section 11; GST statutory provision - Section 25; GST statutory provision - Section 41; GST statutory provision - Section 41A; GST statutory provision - Section 41A(1); GST statutory provision - Section 41A(3); GST statutory provision - Section 59; GST statutory provision - Section 60; GST statutory provision - Section 61; GST statutory provision - Section 62; GST statutory provision - Section 63. The practitioner should place the historical statutory text next to the current text and identify every amendment, proviso, explanation, rule or notification that could change the analysis.

Fact check. The source issue is not a free-standing abstract rule. It arises from the concrete record summarized above. A reliable application note should list the common facts, the different facts, and whether each difference affects jurisdiction, admissibility, limitation, burden, computation or relief.

Remedy check. The recorded result is Remanded / fresh adjudication. Where a matter is remanded, set aside, partly allowed, or disposed with directions, the exact operative language is more important than a binary winner/loser label.

History check. The current closure state is REVIEW_APPEAL_SLP_SUBSEQUENT_TREATMENT_CHECK_PENDING. If that state is pending, the page does not assert that no later case exists. It means the check remains open and must be completed at the point of professional reliance.

Section / provision impact

• GST statutory provision - Section 6 — apply the exact version considered in the judgment.
• GST statutory provision - Section 11 — apply the exact version considered in the judgment.
• GST statutory provision - Section 25 — apply the exact version considered in the judgment.
• GST statutory provision - Section 41 — apply the exact version considered in the judgment.
• GST statutory provision - Section 41A — apply the exact version considered in the judgment.
• GST statutory provision - Section 41A(1) — apply the exact version considered in the judgment.
• GST statutory provision - Section 41A(3) — apply the exact version considered in the judgment.
• GST statutory provision - Section 59 — apply the exact version considered in the judgment.
• GST statutory provision - Section 60 — apply the exact version considered in the judgment.
• GST statutory provision - Section 61 — apply the exact version considered in the judgment.
• GST statutory provision - Section 62 — apply the exact version considered in the judgment.
• GST statutory provision - Section 63 — apply the exact version considered in the judgment.

Case network

• Mohd. Akib v. Union of India and Others — Allahabad High Court · Allowed / set aside
• DIRECTORATE GENERAL OF GST INTELLIGENCE v. GIRISH SACHDEVA — Delhi High Court · Disposed
• M/s Betterbot Tech Services Private Limited v. Union of India and Others — Allahabad High Court · Allowed / set aside
• Sandeep Singhal v. Directorate General of GST Intelligence and Others — Allahabad High Court · Allowed / set aside

Related Finin2min resources

• Case Law Hub
• Search all 692 judgments
• Explore Search, Summons & Arrest

Full judgment and source control

Read / download packaged judgment record

Source class: OFFICIAL_PRIMARY_EXACT_SANITIZED_MIRROR · Repository status: PUBLISH_READY