The Hon’ble Madhya Pradesh High Court (Jabalpur Bench) in the case of Shivam Sadhwani v. Union of India and Others [Misc. Criminal Case No. 58256 of 2025, order dated January 21, 2026] held that where the applicant had no criminal antecedents, had undergone prolonged incarceration, the investigation stood completed with filing of the charge-sheet, and the maximum punishment prescribed under Section 132 of the CGST Act was imprisonment up to five years, the applicant was entitled to be enlarged on regular bail.
Facts:
Shivam Sadhwani (“the Petitioner”) is engaged in filing GST returns and providing accounting services to various clients and was arrested pursuant to FIR/Crime No.1056/2025-DGGI for alleged offences punishable under Sections 132(1)(a)–(d) read with Section 69 of the CGST Act, 2017, and has been in custody since October 14, 2025.
Union of India and Others (“the Respondent”), through the Directorate General of GST Intelligence, registered the FIR and arrested the Petitioner alleging involvement in offences under Section 132 of the CGST Act.
The Petitioner contended that he had been wrongly implicated, that the investigation qua him had been completed and charge-sheet had been filed, that the maximum punishment prescribed under the alleged offences is five years, that there were no criminal antecedents against him, and that considering the period of incarceration, he was entitled to bail.
The Respondent contended that a comprehensive investigation had been conducted, that the matter pertained to an economic offence, and therefore the Petitioner ought not to be released on bail.
Aggrieved by continued detention despite completion of investigation, the Petitioner approached the High Court by way of a second bail application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking regular bail.
Issue:
Whether the Petitioner accused of offences under Section 132 of the CGST Act is entitled to regular bail considering prolonged incarceration, completion of investigation, absence of criminal antecedents, and the prescribed maximum punishment?
Held:
The Hon’ble Madhya Pradesh High Court in Misc. Criminal Case No. 58256 of 2025 held as under:
- Observed that, the Petitioner was arrested on October 14, 2025 and the investigation has been completed and charge-sheet has been filed.
- Noted that, there are no criminal antecedents against the petitioner and the maximum punishment for the alleged offence under Section 132(1) of the CGST Act is imprisonment up to five years with fine.
- Observed that, the Hon’ble Supreme Court in Ratnambar Kaushik v. Union of India [2022 SCC OnLine SC 1678], granted bail after noting prolonged incarceration and likelihood of delay in conclusion of trial.
- Observed that, without commenting on the merits of the case, and considering the totality of facts and circumstances and observations of the Apex Court, the Petitioner deserved to be released on bail.
- Directed that, the Petitioner be released on bail on furnishing a personal bond of Rs. 5,00,000/- with two solvent sureties in the like amount, subject to conditions including regular appearance before the Trial Court, non-tampering with evidence, surrender of passport, location sharing, and compliance with Section 480(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023.
Our Comments:
The High Court placed reliance on the precedent of the Supreme Court in Ratnambar Kaushik(supra), wherein bail was granted considering that the Petitioner had undergone incarceration for more than four months, the investigation was complete, the maximum punishment was five years, and the trial would take time to conclude. Further in Vineet Jain v. Union of India [Criminal Appeal No. 2269 of 2025 order dated April 28, 2025], the Supreme Court observed that in cases under Section 132 of the CGST Act based predominantly on documentary evidence, with no criminal antecedents and limited sentence, denial of bail at all levels was unwarranted.
The reasoning adopted in the instant case aligns with the Supreme Court’s consistent approach that prolonged incarceration of an undertrial, coupled with completion of investigation and absence of antecedents, weighs in favour of grant of bail, particularly where the evidence is documentary in nature and the prescribed punishment is limited.
Relevant Provisions:
Section 132(1), Central Goods and Services Tax Act, 2017
“132. Punishment for certain offences.-
(1) Whoever commits, or causes to commit and retain the benefits arising out of, any of the following offences, namely:-
(a) supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax;
(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;
(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;
(d) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;
(e) evades tax or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);
(f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act;
…”
Section 69 of the Central Goods and Services Tax Act, 2017
“69. Power to arrest. –
(1) Where the Commissioner has reasons to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer of central tax to arrest such person.
(2) Where a person is arrested under sub-section (1) for an offence specified under sub- section (5) of section 132, the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty four hours.
(3) Subject to the provisions of the Code of Criminal Procedure, 1973 (2 of 1974),-
(a) where a person is arrested under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate;
(b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station”
Section 480(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023
“480. When bail may be taken in case of non-bailable offence.
(3) When a person accused or suspected of the commission of an offence punishable with imprisonment which may extend to seven years or more or of an offence under Chapter VI, Chapter VII or Chapter XVII of the Bharatiya Nyaya Sanhita, 2023 or abetment of, or conspiracy or attempt to commit, any such offence, is released on bail under sub-section (1), the Court shall impose the conditions,-
(a) that such person shall attend in accordance with the conditions of the bond executed under this Chapter;
(b) that such person shall not commit an offence similar to the offence of which he is accused, or suspected, of the commission of which he is suspected; and
(c) that such person shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer or tamper with the evidence, and may also impose, in the interests of justice, such other conditions as it considers necessary.”
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