2026-VIL-292-TEL
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SGST High Court Cases

GST - Sections 132(1)(a), 132(1)(i), 132(5), and 70 of the CGST Act, 2017 – Arrest and Remand, Tax Evasion through Online Gaming Syndicate - Violation of Article 22(2) of the Constitution of India – Petitioner, CEO of a payment bank, was arrested by the DGGI for allegedly masterminding an organized syndicate involved in operating illegal online gaming websites through shell entities, leading to tax evasion – The petitioner challenged the arrest and subsequent remand order as arbitrary and illegal, contending that his movement was restricted from the moment investigative officers entered his office, thereby making his production before a Magistrate beyond the mandated 24-hour period – HELD - The officials entered the premises based on valid search authorizations and summons for recording statements. The mere presence of officers during a search does not constitute "custody" or "arrest" until the formal arrest is executed – Following the conclusion of a search and the recording of a voluntary statement, the formal arrest occurred at 05:50 AM on 27.02.2026. The production before the Magistrate at 08:30 PM on the same day was well within the 24-hour statutory limit prescribed under Article 22(2) of the Constitution of India – The evidence gathered during investigation indicated an organized syndicate operating illegal online gaming websites through associated fintech companies and shell entities. The petitioner, as CEO, was identified as a mastermind in a scheme involving the routing of funds without proper invoices, leading to a calculated tax evasion of approximately Rs.840 crores. The investigation revealed a systemic failure in risk monitoring and the use of dummy program managers to facilitate fund movements. Such offences under Section 132(1)(a) and (i) are cognizable and non-bailable - The requirements for prior notice under Section 35(3) of BNSS do not strictly apply to serious economic offences. The non-cooperation and evasive replies of the petitioner during the investigation provided further grounds for custodial interrogation - The petitioners have failed to make out any grounds to interfere in the matter. The writ petition dismissed
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