BackgroundThe appellant was arrested on 17-8-2023 in  registered with the Satara City Police Station, Maharashtra, for offences punishable under Sections 406, 408, 420, 467, 468, 471, 504, 506 read with 34 of the IPC. The allegation was that the appellant, while employed as a business development manager with the complainant’s advertising business and training institute, siphoned off about Rs. 1,66,00,000 (recorded by the Supreme Court at one place as Rs. 1,60,00,000) from the legitimate funds of the complainant. After the Trial Court declined to release him on regular bail, the appellant approached the High Court of Bombay.FactsBefore the High Court, the appellant voluntarily filed an affidavit-cum-undertaking dated 22-3-2024, affirming that he would deposit Rs. 25,00,000 within five months to demonstrate his bona fides. On the basis of this undertaking, the High Court, by order dated 1-4-2024, granted regular bail subject (inter alia) to condition (i) requiring deposit of Rs. 25,00,000 in the Trial Court. The appellant secured his release pursuant to this order but failed to deposit the amount as undertaken on oath.The appellant first filed Interim Application No. 3106 of 2024 (on 6-8-2024) seeking relaxation of the deposit condition, but unconditionally withdrew that application on 23-6-2025. The original complainant thereafter filed Interim Application No. 4524 of 2024 seeking cancellation of bail. By the impugned order dated 1-7-2025, the High Court held that the appellant had foreclosed consideration of his bail on merits by voluntarily offering the deposit and had then reneged on it, and accordingly cancelled the bail in exercise of jurisdiction under Section 483(3) of the BNSS, 2023, directing the appellant to surrender. The appellant challenged this cancellation before the Supreme Court and also pressed his plea for regular bail.Court’s Observations (verbatim)15. We have noticed over a period of time that orders of regular bail and anticipatory bail are being passed by different High Courts subject to deposit of some amount.16. We have come across cases like the one in hand where accused persons have gone to the extent of filing affidavits in the form of undertaking that they would deposit a particular amount within a particular period and then conveniently resile from such undertakings saying it is an onerous condition.17. In some cases, perhaps the accused may abide by such undertaking, but our experience so far has been that in many cases the accused later would not abide and flout the undertaking. In many cases it would be argued on behalf of the accused that he had never made such a statement and the court on its own had recorded in the order that the accused is ready and willing to deposit a particular amount. At times the entire blame is thrown on the lawyer in making such statement for the purpose of obtaining order of bail or anticipatory bail as the case may be. In such circumstances, the concerned court would be left with no other option but to cancel the bail either at the instance of the State or the original complainant.18. The case in hand is one in which the appellant on his own free will and volition filed an affidavit in the form of an undertaking before the High Court that he would deposit an amount of Rs. 25,00,000/- but ultimately resiled to do so and the High Court had to cancel the bail. It was too much for the lawyer of the appellant to argue before the High Court that asking his client to deposit Rs. 25,00,000/- was unreasonable. It reflects on the professional ethics.19. By this order, we make it clear and that too in the form of directions that henceforth no Trial Court or any of the High Courts shall pass any order of grant of regular bail or anticipatory bail on any undertaking that the accused might be ready to furnish for the purpose of obtaining appropriate reliefs.20. The High Courts as well as the Trial Courts shall decide the plea for regular bail or anticipatory bail strictly on the merits of the case. The High Courts and the Trial Courts shall not exercise their discretion in this regard on any undertaking or any statement that the accused may be ready and willing to make.21. This practice has to be stopped. Litigants are taking the courts for a ride and thereby undermining the dignity and honor of the court.23. In the case in hand, so far as the plea for regular bail is concerned, we are not inclined to look into. The appellant has made a mockery of justice. He could be said to have abused the process of law. If at all the High Court wanted to release the appellant on bail, it should have first asked him to deposit the amount within a particular period of time and upon such deposit the appellant could have been released.24. Be that as it may, now we have made ourselves very clear that there shall not be a single order that the High Courts and the Trial Courts shall pass for grant of regular bail or anticipatory bail on the basis of any accused or his/her family members giving an undertaking to deposit a particular amount. The plea shall be decided strictly on merits in accordance with law. If the case is made out on merits the court may exercise its discretion and if no case is made out on merits the court shall reject the plea for regular bail or anticipatory bail as the case may be. However, in any circumstances the High Courts or trial courts shall not pass a conditional order of regular bail or anticipatory bail.Final VerdictThe appeal was dismissed and the cancellation of bail was upheld; the appellant was directed to surrender and a cost of Rs. 50,000 was imposed for gross abuse of the process of law. The Supreme Court further directed that henceforth no Trial Court or High Court shall grant regular or anticipatory bail on the basis of any undertaking to deposit money, and that such pleas must be decided strictly on merits, with the order circulated to all High Courts.Cases Referred / Relied UponKundan Singh v. The Superintendent of CGST and Central Excise — relied upon by the High Court; deprecates the practice of foreclosing consideration of a bail application on merits by voluntarily offering monetary deposits and thereafter reneging on it.Ramesh Kumar v. State of NCT of Delhi — cited for the proposition that a criminal court exercising bail jurisdiction is not expected to act as a recovery agent and that financial deposit as a condition for bail is impermissible.Apurva Kirti Mehta v. State of Maharashtra — cited along with Ramesh Kumar for the same proposition on impermissibility of financial deposit as a bail condition.Biman Chatterjee v. Sanchita Chatterjee — cited for the proposition that non-fulfilment of the terms of a compromise cannot, by itself, be the basis of granting or cancelling bail.

BackgroundThe Respondent-assessee was subjected to proceedings under Section 74(9) of the CGST Act. A tax and penalty of more than Rs. 9.40 Crores was imposed upon him. During the enquiry, the proper officer recorded statements of third parties and entirely based his opinion of guilt on those statements, which were subsequently relied upon while passing the impugned order. The assessee requested an opportunity to cross-examine those persons — a request that was denied. Despite the availability of an appellate remedy, the assessee filed a Writ Petition before the Single Judge of the Kerala High Court alleging a serious infraction of the principles of natural justice. The Single Judge allowed the Writ Petition and set aside the impugned order, relying on Andaman Timber Industries v. Commissioner of Central Excise, Kolkata-II [(2016) 15 SCC 785]. The Revenue preferred the present Writ Appeal challenging that judgment.Relevant FactsThe Revenue contended that Section 74 of the CGST Act contains no express provision for cross-examination of witnesses, and therefore no such right can be insisted upon as a matter of law. The Revenue further argued that the Single Judge wrongly relied on Andaman Timber Industries, which was rendered without considering the binding three-Judge Bench decisions of the Supreme Court in Kanungo & Co. v. Collector of Customs [1983 (13) ELT 1486 (SC)] and Surjeet Singh Chhabra v. Union of India [1997 (89) ELT 646 (SC)]. The assessee countered that the principles of natural justice must be read into the statute regardless of express provision, and that denial of cross-examination — when statements of third parties formed the entire evidentiary foundation against him — rendered the proceedings void. The Division Bench also considered, suo motu, that certain persons were arrayed as co-noticees in the same proceedings and distinguished the right of cross-examination in respect of independent witnesses from co-noticees.Court Observations (Verbatim)"The question of maintainability of the writ petition, despite the existence of an alternate remedy, is no longer res integra...when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." — However, since the challenge was on the ground of violation of natural justice, the writ petition was held to be perfectly maintainable.— Para 9 & 10 (relying on CIT v. Chhabil Dass Agarwal)"It is now settled law that in every quasi-judicial proceedings, the rule of natural justice has to be followed. The rule of natural justice is the tenet of every adjudication proceedings, a violation of which renders the proceedings void. When courts are called upon to decide the validity of quasi-judicial proceedings on the ground of violation of principles of natural justice, it cannot shut its eyes and adopt a pedantic approach and hold that unless the said principle is specifically extended under plenary legislation or the rules framed under it, the insistence of the principles is not mandatory."— Para 15"The entire basis for the formation of an opinion of guilt against the petitioner was the statements of third parties recorded by the proper officer. If the writ petitioner was to prefer an effective representation against the proposals in the notice, he had to know the basis of the allegations against him and test the evidence used against him. It was therefore imperative for the proper officer to have granted the opportunity of cross-examination to the petitioner."— Para 14"A breach of the principles of natural justice strikes at the fundamental core of procedural fairness, rendering the decision invalid unless exceptional circumstances justify such deviation...the denial of natural justice at the initial stage cannot be cured at the appellate stage...the principles of natural justice are the cornerstone of justice, ensuring that no person is condemned unheard."— Para 16 (relying on Krishnadatt Awasthy v. State of M.P., 2025 SCC Online 179)"Principles of natural justice that are reflected in Article 311, are not an empty incantation. They form the very bedrock of Article 14 and any violation of these principles tantamounts to a violation of Article 14 of the Constitution...principles of natural justice guaranteed under Article 14, prohibit a decision-making adjudicatory authority from taking any arbitrary action, be it substantive or procedural in nature."— Para 22 (relying on Aureliano Fernandes v. State of Goa [(2024) 1 SCC 632], Para 35-36)"We hold that in appropriate cases, extending an opportunity of cross-examination in a proceedings under Section 74(9) of the CGST Act 2017 is an integral part of the principles of natural justice, a violation of which will render the proceedings void."— Para 25 (Court's final conclusion)Important Limitation (Para 24): The right to cross-examine does NOT extend to co-noticees. The assessee can only request the proper officer to supply copies of replies submitted by co-noticees — not seek their cross-examination.Final VerdictWrit Appeal filed by Revenue dismissed. Single Judge's order setting aside the impugned GST order confirmed and upheld. Division Bench held that in proceedings under Section 74(9) of the CGST Act, the right to cross-examine independent witnesses whose statements form the basis of the impugned order is an integral part of the principles of natural justice — denial thereof renders the order void. No costs.Cases Referred by CourtAndaman Timber Industries v. Commissioner of Central Excise, Kolkata-IIRelied upon(2016) 15 SCC 785 — Supreme Court — Single Judge's basis for allowing writ petition; upheld by Division BenchKanungo & Co. v. Collector of Customs, Calcutta and OthersDistinguished1983 (13) ELT 1486 (SC) — Supreme Court — Rendered under Sea Customs Act, 1878 (repealed); held inapplicable; cannot have universal applicationSurjeet Singh Chhabra v. Union of IndiaDistinguished1997 (89) ELT 646 (SC) — Supreme Court — Relied upon by Revenue; not accepted by Division BenchCommissioner of Income Tax & Ors. v. Chhabil Dass AgarwalRelied upon(2014) 1 SCC 603 — Supreme Court — Four exceptional circumstances where writ lies despite alternate remedy, including violation of natural justiceKrishnadatt Awasthy v. State of M.P. and OthersRelied upon3-Judge Bench2025 SCC Online 179 — Supreme Court — Breach of natural justice strikes at fundamental core of procedural fairness; denial at initial stage cannot be cured at appellate stageAyaaubkhan Noorkhan Pathan v. State of MaharashtraRelied upon(2013) 4 SCC 465 — Supreme Court — Non-extension of cross-examination opportunity vitiates decision; part of principles of natural justiceAjay Saraogi v. Union of IndiaRelied upon2024 (136) GSTR 330 — Calcutta High Court (Division Bench) — Right of cross-examination imbued under Customs Act; principles of natural justice not excludedUnion of India & Another v. Tulsiram PatelRelied uponConstitution Bench(1985) 3 SCC 398 — Supreme Court — Principles of natural justice cannot be altogether excluded even by plenary/subordinate legislation; if excluded, such rule is ultra viresKothari Filaments and Another v. Commissioner of Customs (Port) Kolkata and OthersRelied upon(2009) 2 SCC 192 — Supreme Court — Customs Act does not specifically exclude natural justice; denial of cross-examination of relied-upon witnesses renders confiscation order invalidAureliano Fernandes v. State of Goa and OthersRelied upon(2024) 1 SCC 632 — Supreme Court — Natural justice is not empty incantation; forms bedrock of Article 14; violation tantamounts to violation of Article 14; Audi Alteram Partem is a twin anchor of natural justiceManeka Gandhi v. Union of IndiaRelied upon7-Judge Bench(1978) 1 SCC 248 — Supreme Court — Referenced within Aureliano Fernandes; life and liberty cannot be restricted except by procedure that is just, fair and reasonable

Facts of the CaseThe complainant department filed Complaint No. GST/01/2018 before the learned Additional Chief Judicial Magistrate, Kasauli, alleging commission of offences under Section 69 read with Section 132 of the HPGST/CGST Act, 2017 and Section 20 of the IGST Act, 2017 against the petitioners, who were partners of M/s G.M. Powertech.It was alleged that the firm had availed fraudulent input tax credit (ITC) during the financial years 2017–18 and 2018–19 by declaring inward supplies from fictitious and non-existent firms based in Delhi and Uttar Pradesh. The GST portal verification revealed that goods were purportedly transported in fake or non-existent vehicles, including two-wheelers and cars incapable of carrying heavy consignments. Investigation showed that suppliers mentioned in invoices did not exist at the given addresses. Fraudulent ITC amounting to substantial sums was alleged.The learned Trial Court, upon finding sufficient material, summoned the accused and fixed the matter for recording pre-charge evidence.Aggrieved, the petitioners approached the High Court seeking quashing of the complaint and subsequent proceedings. They contended that the GST Acts were silent regarding investigation and filing of complaint, that departmental officers exercised unbridled powers, that Sections 69 and 132 were arbitrary and violative of Article 21 of the Constitution, and that the trial court erred in proceeding as a warrant case and ordering pre-charge evidence.The principal questions before the High Court were:Whether the provisions of the Code of Criminal Procedure apply to investigation and trial under the GST Acts.Whether the complaint and proceedings were liable to be quashed under Section 482 Cr.P.C.Whether the trial court erred in treating the matter as a warrant case and directing pre-charge evidence.Court Observations and DecisionThe High Court examined the law relating to quashing of criminal proceedings and reiterated the principles governing exercise of inherent powers under Section 482 Cr.P.C., as laid down by the Supreme Court. It observed that quashing is permissible only in limited circumstances such as absence of prima facie offence, legal bar to proceedings, or manifest abuse of process.On applicability of Cr.P.C., the Court relied on the Supreme Court’s decision in Radhika Agarwal v. Union of India, holding that by virtue of Sections 4(2) and 5 Cr.P.C., the provisions of the Code apply to offences under special statutes unless expressly excluded. It further noted that GST Acts are not a complete code in respect of search, seizure, arrest and procedure, and therefore Cr.P.C. provisions apply in the absence of any contrary provision.The Court rejected the contention that the Act was silent regarding investigation and filing of complaint. It held that Cr.P.C. governs such procedure unless excluded.Regarding the trial as a warrant case, the Court observed that Section 132 provides punishment up to five years’ imprisonment. Since a warrant case under Section 2(x) Cr.P.C. includes offences punishable with imprisonment exceeding two years, the trial court was correct in proceeding as a warrant case. Under Section 244 Cr.P.C., in cases instituted otherwise than on a police report, the Magistrate is required to record prosecution evidence after appearance of the accused. Therefore, ordering pre-charge evidence was legally justified.On the contention that investigation was improperly conducted, the Court held that while exercising inherent jurisdiction, it only examines whether a prima facie case exists and does not evaluate the sufficiency or credibility of evidence. The verification conducted by officials, who found that suppliers did not exist at the given addresses, was sufficient at the prima facie stage. Issues relating to quality of investigation are matters for trial.The Court also held that the decision in Mukesh Singh v. State (Narcotic Branch of Delhi) did not assist the petitioners, as it does not render departmental investigation invalid per se.Finding no ground falling within the parameters for quashing, the High Court dismissed the petition. It clarified that its observations were confined to disposal of the petition and would not affect the merits of the trial.Cases ReferredB.N. John v. State of U.P., 2025 SCC OnLine SC 7, Supreme Court of India.State of Haryana v. Ch. Bhajan Lal, 1992 Supp (1) SCC 335, Supreme Court of India.Ajay Malik v. State of Uttarakhand, 2025 SCC OnLine SC 185, Supreme Court of India.Radhika Agarwal v. Union of India, (2025) 150 GSTR 121, Supreme Court of India.Directorate of Enforcement v. Deepak Mahajan, (1994) 3 SCC 440, Supreme Court of India.A.R. Antulay v. Ramdas Sriniwas Nayak, (1984) 2 SCC 500, Supreme Court of India.Mukesh Singh v. State (Narcotic Branch of Delhi), AIR 2020 SC 4794, Supreme Court of India. 

Facts :The petitioner challenged an order passed under Section 73 of the CGST/SGST Act on the ground that proper notice was not served. It was contended that although the show cause notice was uploaded on the GST portal, it was not served through other modes under Section 169(1)(a) to (c). The petitioner argued that mere portal upload does not constitute valid service and the order violated principles of natural justice.Court Decision:The Court held that Section 169 permits service of notice through any one of the prescribed modes, including making it available on the common portal under Section 169(1)(d). It ruled that service through the portal constitutes valid service and is sufficient compliance under the statute. Relying on the Division Bench decision in Sunil Kumar K., the Court found no infirmity in the proceedings and dismissed the writ petition, granting liberty to pursue statutory remedies.Cases Referred:Sunil Kumar K. v. State Tax Officer-I, Kottarakkara

BACKGROUNDThe Department conducted a detailed investigation and found that the petitioner and his son had incorporated or established 28 firms which, in collusion with various other traders, facilitated fraudulent availment of Input Tax Credit without any actual supply of goods or services. One of the firms — a sole proprietary concern of the petitioner — was identified as part of this network. The total fake ITC availed by entities controlled by the petitioner's son was alleged to be more than Rs.115 crores. After investigation, analysis of documents, and recording of statements of associated persons, a Show Cause Notice dated 31.07.2024 was issued to several companies and individuals including the petitioner. A detailed Order-in-Original was passed on 30.01.2025 confirming demands and imposing penalties on the petitioner and multiple connected firms and individuals. Personal hearing was granted and the petitioner filed a reply. Aggrieved, the petitioner filed a writ petition before the Delhi High Court. Notably, the petitioner's son had already filed an appeal before the Appellate Authority against the very same impugned order. CRUCIAL FACTSThe petitioner challenged the impugned order on the ground that he was not a taxable person under Section 74 read with Section 122(1) of the CGST Act, being neither the authorized signatory nor the operator of the main firm which availed the ITC — that firm being run by his son. He further argued that at best, under Section 122(3), the maximum penalty imposable on him was Rs.25,000/-. He also argued that under Section 75(13) of the CGST Act, once penalty is imposed under Section 73 or 74, no further penalty for the same act can be imposed under any other provision of the CGST Act. The Revenue contended that the petitioner's own sole proprietary concern was part of the fake firm network, and that staff of the son had admitted to irregularities committed by both father and son. The Revenue also urged that the impugned order being an appealable order under Section 107, the writ petition was not maintainable — particularly given that one co-noticee (the son) had already availed of the appellate remedy against the same order.  COURT OBSERVATIONS (Verbatim — Crucial)On misuse of ITC and the GST regime:"It is observed by this Court in a large number of writ petitions that this facility under Section 16 of the CGST Act has been misused by various individuals, firms, entities and companies to avail of ITC even when the output tax is not deposited or when the entities or individuals who had to deposit the output tax are themselves found to be not existent. Such misuse, if permitted to continue, would create an enormous dent in the GST regime itself."On seriousness of allegations:"The allegations against the Petitioner in the impugned order are extremely serious in nature. They reveal the complex maze of transactions, which are alleged to have been carried out between various non-existent firms for the sake of enabling fraudulent availment of the ITC."On writ jurisdiction and factual disputes:"The Court, in exercise of its writ jurisdiction, cannot adjudicate upon or ascertain the factual aspects pertaining to what was the role played by the Petitioner, whether the penalty imposed is justified or not, whether the same requires to be reduced proportionately in terms of the invoices raised by the Petitioner under his firm or whether penalty is liable to be imposed under Section 122(1) and Section 122(3) of the CGST Act."On multiplicity of proceedings:"The persons, who are involved in such transactions, cannot be allowed to try different remedies before different forums, inasmuch as the same would also result in multiplicity of litigation and could also lead to contradictory findings of different Forums, Tribunals and Courts."On when writ jurisdiction is available:"Writ jurisdiction is not barred in such cases, especially if there is any arbitrary action by the Department or the order itself is without jurisdiction or there is non-compliance of principles of natural justice. In the present case, none of the three grounds are made out as the SCN and the impugned order have been passed by the appropriate authority which has jurisdiction. Secondly, the Petitioner had been awarded an opportunity to file a reply and had also been afforded a hearing."On clean hands doctrine:"It is well settled in various decisions of the Supreme Court that petitions under Article 226 of the Constitution of India would be liable to be entertained only in case of persons who come with clean hands and not in favour of the persons who present twisted facts or misrepresent the true and correct picture on record." FINAL VERDICTThe writ petition is dismissed with costs of Rs.50,000/- to be deposited with the Delhi High Court Bar Association within four weeks. The petitioner is at liberty to urge all issues in an appeal under Section 107 of the CGST Act.👎 THUMBS DOWN (Against Assessee — Dismissed with costs)