The Delhi High Court refuse to cancel the bail granted to an accused in a Goods and Services Tax (GST) evasion case involving alleged tax fraud of ₹72 crore, while sharply criticising the investigating agency for its failure to complete the probe even after more than five years.

The bench of Justice Amit Mahajan observed that the investigation in the said case is incomplete and no criminal complaint has been filed against the accused till date, despite the case having been initiated in 2020.

Rejecting the plea filed by the Directorate General of GST Intelligence (DGGI), the Court held that the accused, Kamal Kishore Aggarwal, cannot be subjected to “unending incarceration” at the whims of the department, especially when the department itself has taken no effective steps to conclude the investigation.

The DGGI had challenged a 2020 order of the trial court granting bail to Aggarwal, who is accused of evading GST by clandestinely supplying cigarettes, an offence punishable under Section 132 of the Central Goods and Services Tax Act, 2017.

The department argued that the Chief Metropolitan Magistrate had erred in granting bail at an early stage of investigation in a serious economic offence, pointing out that the alleged evasion amounted to ₹72 crore, while the accused had deposited only ₹1.35 crore towards GST dues.

However, dismissing the plea, the High Court observed that despite the passage of over five years since the investigation commenced, the department had failed to file a criminal complaint and was still in the process of doing so.

The Court further remarked that even if the accused had remained in custody, he would have been entitled to default bail due to the department’s failure to complete the investigation within the statutory time frame

“Although the learned CMM ought to have given more deference to the gravity of offence, the lackadaisical and lethargic approach of the department do not merit interference in the liberty granted to the respondent at this juncture,” the Court said.

The Court further noted that the department had not alleged that Aggarwal misused the liberty granted to him while on bail. It observed that the department appeared to be interested only in securing the custody of the accused, rather than in pursuing the adjudication of the case.

“In view of the same, this Court finds no reason to cancel the bail granted to the respondent after more than five years,” the Court said.

Counsel for Petitioner: Mr. Satish Aggarwala, SSC with Mr. Gagan Vaswani, Adv

Counsel for Respondent: Mr. Ankit Acharya, Ms. Pratiksha Sharma, Ms. Ritu Chaudhary, Mr. Ayush Jain & Mr. Mukesh Kumar, Advs

Title: DIRECTORATE GENERAL OF GST INTELLIGENCE v. KAMAL KISHORE AGGARWAL