Sanchayita Lahkar

The High Court of Gujarat Single Bench of Justice M. R. Mengdey allowed an application for regular bail, directing the release of the applicant in connection with an offence registered with the Directorate General of GST Intelligence, Ahmedabad. The court held that the investigation in the case was complete, the chargesheet had been filed, and the applicant had been in custody since December 2024. It recorded that the application "deserves consideration" and ordered release on a personal bond with specific conditions to be observed. The court further stated that the trial court would not be influenced by the prima facie observations made in the present order.

The matter concerned an offence registered vide File No. DGGI/AZU/GR. E/12(4)18/2024-25 with the Directorate General of GST Intelligence (DGGI), Ahmedabad. The applicant sought regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The prosecution alleged that the applicant had illegally obtained the benefit of Input Tax Credit (ITC) by showing fictitious purchase transactions of goods, without any actual purchase, from certain firms. According to the prosecution, the applicant had created forged firms using documents such as Aadhar cards and PAN cards, and had claimed ITC worth more than Rs. 10 crores through these fictitious transactions. Once the purpose was served, the registration of these firms was cancelled.

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The applicant, through counsel, contended that the transactions in question were not fictitious, and that goods had indeed been purchased from several firms. It was submitted that the cancellation of GST registrations of these firms was due to lapses on their part, for which the applicant bore no responsibility. The applicant had been arrested on 17 December 2024 and remained in custody since that date. Counsel argued that the alleged offence carried a maximum punishment of five years, and that the applicant had already undergone nearly eight months of incarceration. It was further submitted that the applicant enjoyed a good reputation in society, and that continued detention would serve no useful purpose. The applicant expressed willingness to comply with any conditions imposed by the court.

On the other hand, counsel representing the GST authorities opposed the bail application, maintaining that the applicant had orchestrated the creation of forged firms and engaged in fictitious transactions to fraudulently claim substantial ITC. The opposition argued that the nature of the allegations and the financial magnitude involved warranted denial of bail.

The court recorded that investigation had been completed, the complaint had been filed, and the applicant had been in custody for a significant period. It noted that the allegations involved the creation of firms by the applicant himself and obtaining ITC benefits through transactions that were allegedly fictitious.

Justice M. R. Mengdey stated: "As per catena of decisions of Hon’ble Supreme Court, there are mainly 3 factors which are required to be considered by this court i.e. prima-facie case, availability of Applicant accused at the time of trial and tampering and hampering with the witnesses by the accused." The court further recorded: "That the learned Advocate for the Applicant has submitted that the Applicant Accused is not likely to flee away."

The court observed: "That the Applicant is in custody since 17.12.2024." It also referred to "The law laid down by the Hon'ble Apex Court in the case of Sanjay Chandra v. C.B.I. reported in (2012) 1 SCC 40." The court stated: "Having heard the learned Advocates for the parties and perusing the record produced in this case as well as taking into consideration the facts of the case, nature of allegations, gravity of accusation, availability of the applicant accused at the time of Trial etc. and the role attributed to the present applicant accused, the present application deserves to be allowed."

The High Court ordered that the applicant be released on bail in connection with the FIR upon executing a personal bond of Rs. 10,000 with one surety of the like amount to the satisfaction of the trial court subject to the following conditions-

The applicant was directed not to directly or indirectly make any inducement, threat, or promise to any person acquainted with the facts of the case to dissuade them from disclosing such facts to the court or police, or to tamper with evidence.

1. The applicant was to maintain law and order and refrain from engaging in criminal activities.

2. The court required the applicant to furnish complete and correct residential address proof to the investigating officer and trial court, and not change residence without prior permission.

3. Contact numbers of the applicant and sureties were to be provided to the trial court, with any changes to be communicated immediately in writing.

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4. The applicant was to mark presence at the concerned police station once a month for six months between 11:00 a.m. and 2:00 p.m.

5. An affidavit detailing any immovable properties, whether self-acquired or ancestral, with description, location, and present value, was to be filed before the trial court.

6. The applicant was prohibited from leaving India without prior permission of the trial court and was required to surrender his passport within a week or file an affidavit if no passport was held.

The bail bond was to be executed before the trial court with jurisdiction, and the trial court could allow time for furnishing a solvency certificate if requested. The court directed that if any condition was breached, the trial court could issue a warrant or take other lawful action. Authorities were to release the applicant only if not required in any other case. The trial court was instructed not to be influenced by the prima facie observations of the High Court in this order.

Advocates Representing the Parties:

For the Petitioner: Mr. Apurva N. Mehta, Advocate

For the Respondents: Mr. Bhargav Pandya, APP; Mr. Utkarsh R. Sharma, Advocate

Case Title: Sunil Hiralal Mandowara v. State of Gujarat & Anr.

Case Number: R/Criminal Misc. Application No. 7294 of 2025

Bench: Justice M. R. Mengdey