Punjab & Haryana High Court Grants Regular Bail in GST Evasion Case: Key Takeaways from Parteek Das Gupta Vs State of Haryana
Case Overview
The Punjab and Haryana High Court recently adjudicated a significant bail matter in Parteek Das Gupta Vs State of Haryana and others, wherein the petitioner faced serious allegations of fraudulent availment of Input Tax Credit (ITC) and large-scale tax evasion under the Haryana Goods and Service Tax Act, 2017. The Court ultimately granted regular bail, weighing multiple legal considerations including the nature of evidence, the stage of proceedings, and the petitioner's conduct throughout the investigation.
This case carries important implications for GST enforcement proceedings and the rights of accused persons facing arrest under the tax statute.
Background and Charges
The case originated from proceedings registered as case No. HGST-IU/PIR 1122016 dated 25.11.2022, initiated before the Additional Chief Judicial Magistrate, Gurugram. The petitioner was charged under Sections 69, 132, and 137 of the Haryana Goods and Service Tax Act, 2017, in connection with alleged wrongful availment of ITC and tax evasion reportedly exceeding Rs. 7 crores.
The State's case rested on the allegation that the petitioner was the primary architect of the alleged fraud, purportedly orchestrating a network of bogus firms to facilitate fraudulent ITC claims and tax evasion. The prosecution further submitted that once penalties were factored in alongside the principal tax demand, the total financial liability swelled to over Rs. 19 crores.
Petitioner's Submissions
Cooperation During Investigation
One of the central planks of the petitioner's bail application was his sustained cooperation with the investigating authorities dating back to 2022. The petitioner contended that he had regularly appeared before the department and had diligently furnished all information and documentation sought of him over this extended period.
It was only on 01.02.2024 that his responses were deemed unsatisfactory, which led to his arrest. The petitioner argued that this sequence of events itself demonstrated that custodial detention at that advanced stage served no investigative purpose.
Show Cause Notice Issued Post-Arrest
An important procedural argument raised before the Court was that the show cause notice under Section 74(1) of the HGST Act was issued as late as 29.03.2024 — that is, only after the petitioner's arrest. The petitioner submitted that this timeline raised serious questions about the justification for arrest as an investigative tool, given that the formal demand proceedings were still in their nascent stages when he was taken into custody.