The Karnataka High Court has ruled that the provisions of the Bhartiya Nagrik Suraksha Sanhita, 2023 (BNSS) are applicable to criminal proceedings under the Goods and Services Tax (GST) law.
The petitioner, a proprietor of M/s. JMG Enterprises/Heena Enterprises and M/s. Heena International, is accused of generating fake invoices to fraudulently claim ₹5.10 crores in GST input tax credit (ITC) without actual supply of FMCG goods. He allegedly colluded with others to fabricate transactions and diverted goods to the open market without proper invoicing, enabling wrongful ITC claims by other entities. The remand application also notes that the petitioner tried to influence witnesses to give false statements and tampered with evidence by deleting WhatsApp messages, thereby obstructing the investigation.
The bench of Justice Hemant Chandangoudar observed, “the petitioner-arrestee was arrested against the offence punishable with no more than five years of imprisonment plus fine, but without the issuance of notice of appearance directing him to appear before the officer authorised under Section 69(1) of the CGST Act, and the fact that the petitioner has been incarcerated since 30.1.2025, coupled with the settled bail jurisprudence to exercise discretion in favour of accused of such nature, I deem it fit that the petitioner be enlarged on bail.”
The CGST Act, 2017 outlines various assessment and audit procedures, including scrutiny of returns and summary assessments. While prosecution can begin before completing a summary assessment or special audit, no offence based on discrepancies in returns can be conclusively established until these processes are completed.
The court partly allowed the petition by granting bail to the petitioner, requiring a personal bond of ₹1,00,000 and one local surety of the same amount, to be submitted to the Trial Court within two weeks of his release.
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