The Supreme Court comprising of Justice Sanjay Karol and Justice Satish Chandra Sharma has granted the bail to the person accused of wrongful availment of Input Tax Credit (ITC) which was rejected by the Allahabad High Courts on the ground that accused has not surrendered when Supreme Court withdrew the concession of parole during the COVID-19.
The Petitioner was implicated in a complaint filed by the Directorate General of GST Intelligence (DGGI), Meerut Zonal Unit, alleging wrongful availment of Input Tax Credit (ITC) to the tune of Rs. 32.26 Crores under Sections 132(1)(b), (c), and (i) of the CGST Act, 2017. He was arrested on 27.02.2021, remanded to judicial custody, and a complaint was filed on 24.04.2021.
The petitioner was granted interim bail on 26.05.2021 pursuant to the general directions issued by this Court during the COVID-19 pandemic. While being released on interim bail, the Petitioner continued to appear regularly before the Trial Court, complied with all judicial directions, and remained within the control and jurisdiction of the Court.
The Supreme Court passed an order withdrawing the suo motu interim bail reliefs and directed all such persons to surrender within 15 days. The Petitioner appeared before the CJM on 29.03.2023, neither the CJM passed, nor the prosecution sought any direction for the Petitioner to surrender.
The Petitioner continued to diligently appear before the Trial Court and fully cooperated in proceedings, thereby continuing to be in constructive custody. The Petitioner remained within the effective control and jurisdiction of the Court, and was never declared to be absconding, nor was any coercive process ever issued against him. At no stage was the Petitioner declared absconding or non-cooperative.
The Special Leave Petition was filed against the Judgment and Order dated 07.05.2025 passed by the Allahabad High Court. The High Court refused to consider the Petitioner’s bail application under Section 439 of the Code of Criminal Procedure, 1973 (CrPC) on the sole and hyper-technical ground that the Petitioner had not “(physically) surrendered” to be in “(physical) custody” pursuant to the Court’s Order dated 24.03.2023 in Suo Motu Writ Petition (C) No. 01 of 2020, despite the admitted and uncontroverted fact that the Petitioner had been regularly appearing before the Trial Court.
Sr. Adv. Siddarth Luthra along with Advocate Sanjay Abbot argued that Ground of “Non-Surrender” is Hyper-technical and Violates Article 21 of the Constitution. There was no formal direction to surrender as issued by CJM post 24.03.2023. The bail was Denied of bail without merit consideration amounts to pre-trial punishment.
It was further argued that the Petitioner fulfilled the Tripod Test of Bail. There is no flight risk as he has surrendered his passport at the time of interim bail, he cannot tamper with evidence as it is documentary in nature and already seized by the investigating agency, and there is no apprehension that he will influence witnesses as he is on bail since 26.05.2021 and complied with all terms of interim bail and regularly appeared before Trial Court.
Mr. Luthra argued that the Petitioner appeared around 46 times before the Ld. CJM. Therefore, the Petitioner was in constructive custody of the Court and physical surrender was not mandatory under Section 439, CrPC.
Mr. Luthra argued that the Petitioner was never called upon to surrender after the withdrawal of interim bail directions on 24.03.2023. He appeared before the CJM on 29.03.2023 and regularly thereafter. No surrender direction was passed.
The Apex Court held that in the event of arrest in connection with Compliant Case No.6085 of 2021, titled “Sanjay Jain vs. Union of India & Anr.”, on the file of the Special Chief Judicial Magistrate, Meerut, the petitioner shall be released on bail on the appropriate terms and conditions as may be fixed by the Investigating Officer/Arresting Officer.
Consequently, Special Chief Judicial Magistrate, Meerut after hearing the arguments made by the Special Public Prosecutor, Lakshya Kumar Singh directed the petitioners to furnish the security bond of Rs. 10 lakhs each within the period of 2 days.
Case Details
Case Title: Sanjay Jain Petitioner(S) Versus Union Of India & Anr.
Case No.: S.L.P. (Crl.) No(s).8756/2025
Date: 05-06-2025
Counsel For Petitioner: Sr. Adv. Siddarth Luthra, Adv. Sanjay Abott, Adv. Sakshi Jain, Adv. Mihir Joshi, Adv. Manas Agrawal, Adv. Ishita Soni, Adv. Pranya Madan, AOR Jaydip Pati
