Case Details: Samir Kumar Sahu Versus Union of India (2025) 31 Centax 373 (Ori.)
Judiciary and Counsel Details
- Dr. S.K. Panigrahi, J.
- S/Shri Bibekananda Bhuyan, Sr. Adv., Sourav Suman Bhuyan & Byomakesh Tripathy, Advs. for the Appellant.
- Shri Avinash Kedia, Jr. S.C. for the Respondent.
Facts of the Case
The Petitioners were arrested pursuant to a complaint alleging fraudulent availment and passing of Input Tax Credit (ITC) without actual supply of goods, under the provisions of the CGST Act and the Odisha GST Act. The first Petitioner contended that he was merely an employee of the second Petitioner, the proprietor, and had no role in the day-to-day operations of the firm. The second Petitioner submitted that he had been falsely implicated without a proper assessment of the relevant invoices. It was further asserted that the arrest was unwarranted and that the Petitioners were entitled to bail. The Department, however, maintained that the amount of fraudulently availed ITC exceeded ₹11.97 crore, and that the case attracted the bar against bail at the threshold stage under Section 132(5) read with Section 69 of the CGST Act and Odisha GST Act. The matter was accordingly placed before the High Court of Orissa.
High Court Held
The Orissa High Court held that if the alleged amount of tax fraud exceeds ₹5 crore, such offences are categorised as cognizable and non-bailable under Section 132(5) of the CGST Act. In the present case, the quantum of wrongful ITC availed exceeded ₹11.97 crore, clearly crossing the statutory threshold. The Court observed that the proceedings were still at the stage of investigation and the allegations involved a deliberate scheme to defraud the exchequer. It further noted that the nature of the evidence, being largely electronic and documentary, presented unique vulnerabilities, as digital trails could be manipulated, including potential access to cloud-stored records or backdated documentation. While these concerns were not determinative of guilt, they weighed against granting bail at this stage. In view of the gravity of allegations, scale of financial irregularities, and ongoing nature of investigation, the Court found it inappropriate to grant bail and accordingly dismissed the applications.
List of Cases Cited
- State of Gujarat v. Mohanlal Jitamalji Porwal — 1987 taxmann.com 612 (SC) — Referred [Para 11]
- Y.S. Jagan Mohan Reddy v. C.B.I. — AIR 2013 SUPREME COURT 1933. — Referred [Para 10]
