2025-VIL-1265-RAJ
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SGST High Court Cases

GST – Evasion, Rejection of bail application - The petitioners are accused of facilitating the onboarding of certain companies with online payment aggregators for receiving online gaming revenues without payment of GST. The prosecution alleged that the companies had collectively received transactions towards online gaming services, resulting in GST evasion - The petitioners were arrested on 12.09.2025 and their bail applications were rejected by the lower court - Whether the petitioners were entitled to bail considering the gravity of the alleged GST evasion – HELD - Under the Section 132 of the CGST Act, where the amount of tax evaded exceeds Rs. 5 crores, the offence is cognizable and non-bailable, and attracts imprisonment up to five years. Given the massive scale of the alleged tax evasion, the statutory rigour attendant to large-scale tax frauds was applicable - the prima facie evidence, including the petitioners' own admissions, search and seizure, and the documentary and electronic material, provided a strong basis for the prosecution's case. There was also a real risk of the petitioners tampering with evidence and fleeing the jurisdiction considering the involvement of multiple payment aggregators, numerous UPI IDs/VPAs, and foreign connections - The gravity of the offence, the magnitude of the alleged evasion, the propensity to tamper with evidence, and the risk of absconding were relevant factors in rejecting bail – Further, the petitioners had approached the Court with unclean hands by concealing the true scale of evasion - The bail applications are dismissed
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