In a significant ruling on transit anticipatory bail, the Karnataka High Court granted interim relief to six petitioners facing prosecution under Section 132 of the Central Goods and Services Tax (CGST) Act, 2017. The Court allowed the petitioners - who apprehend arrest in Chennai - a limited 10-day bail period to approach the jurisdictional court, balancing investigative concerns with the right to seek legal recourse. The judgment underscores the procedural safeguards available to accused persons when offences span multiple jurisdictions, while imposing strict conditions to prevent flight risk.
Background & Facts
The Dispute
The petitioners, directors and employees of M/s. Attica Gold Pvt. Ltd., are accused of evading revenue exceeding Rs. 100 crores under the CGST Act. The Directorate General of Goods and Services Tax Intelligence (DGGI), Chennai Zonal Unit, registered proceedings (File No. DGGI/INT/INTL/335/2026) under Sections 132(1)(a) and 132(1)(i) of the CGST Act, 2017, alleging fraudulent transactions involving the purchase of old/used gold and silver jewellery from walk-in customers across South India.
Key Facts
- The petitioners operate multiple branches in South India, with their Bengaluru office cited as the primary location in these petitions.
- The DGGI conducted raids at the petitioners' business premises, seizing relevant documents.
- The petitioners apprehend imminent arrest by the DGGI, Chennai, before they can approach the jurisdictional court for anticipatory bail.
- The alleged offences carry severe penalties, including imprisonment and fines under the CGST Act.
Procedural History
- 2026: DGGI, Chennai, initiated proceedings (File No. DGGI/INT/INTL/335/2026) under the CGST Act.
- 22.06.2026: Six criminal petitions (Crl.P Nos. 8230, 8231, 8232, 8233, 8234, and 8236 of 2026) filed before the Karnataka High Court under Section 438 of the Code of Criminal Procedure (CrPC) (noted as filed under Section 482 of the Bharatiya Nagarik Suraksha Sanhita (BNSS)).
- The petitions sought transit/interim anticipatory bail for 8 weeks to enable the petitioners to approach the jurisdictional court in Chennai.
The Parties' Positions
For the Petitioners
- Argued that they are apprehending arrest in Chennai and require transit anticipatory bail to approach the jurisdictional court.
- Cited the Supreme Court's decision in Priya Indoria v. State of Karnataka ((2024) 4 SCC 749) to support the plea for interim relief.
- Emphasized that the petitioners are cooperating with the investigation and have no intention to flee.
For the Respondents
- Opposed the bail petitions, contending that the petitioners pose a flight risk and may evade justice if granted interim relief.
- Submitted that the petitioners are involved in a large-scale revenue evasion case, warranting strict conditions if bail is granted.
Relief Sought
The petitioners sought transit anticipatory bail for a period of 8 weeks, or such period as the Court deems fit, to enable them to approach the jurisdictional court in Chennai and file an application for anticipatory bail under Section 438 CrPC.
The Legal Issue
The central question before the Court was whether transit anticipatory bail should be granted to accused persons apprehending arrest in a jurisdiction outside the High Court's territorial limits, particularly when the alleged offences involve serious economic violations under the CGST Act, 2017. Additionally, the Court had to determine the appropriate conditions to impose to prevent flight risk while ensuring the petitioners' right to seek legal recourse.
Arguments Presented
For the Petitioners
- Relied on the Supreme Court's judgment in Priya Indoria v. State of Karnataka, which delineated the scope of interim anticipatory bail and the power of High Courts to grant such relief.
- Argued that denying transit bail would violate their right to approach the jurisdictional court, as they apprehend arrest in Chennai.
- Contended that the petitioners are willing to cooperate with the investigation and have no history of evading legal proceedings.
For the Respondents
- Opposed the bail petitions on the ground that the petitioners are involved in a serious economic offence involving Rs. 100 crores in revenue evasion.
- Submitted that the petitioners pose a flight risk and may abscond if granted interim relief.
- Requested that strict conditions be imposed if bail is granted, including surrender of passports and execution of personal bonds.
The Court's Analysis
The Court analyzed the petitioners' plea in light of the legal principles governing transit anticipatory bail, particularly the Supreme Court's ruling in Priya Indoria v. State of Karnataka. The Court observed:
"If the facts of the present case are evaluated in the light of the judgment of the Hon'ble Supreme Court in Priya Indoria's case supra, I am of the view that without expressing any opinion on the merits of the case, if the petitioners herein who are seeking transit anticipatory bail so as to enable them to approach the jurisdictional Court at Chennai in Tamilnadu State and file necessary application seeking anticipatory bail are granted relief for a limited period, the same would serve the ends of justice."
The Court acknowledged the respondents' concerns regarding flight risk but held that granting interim relief for a limited period would strike a balance between the petitioners' right to seek legal recourse and the investigative interests of the state. The Court emphasized that the relief is purely procedural and does not comment on the merits of the allegations against the petitioners.
The Verdict
The Karnataka High Court allowed the criminal petitions and granted interim anticipatory bail to the petitioners for a limited period of 10 days from the date of receipt of the order. The bail is subject to the following conditions:
- The petitioners shall execute a personal bond of Rs. 1,00,000 each, with two sureties for the like sum to the satisfaction of the respondents.
- The petitioners shall cooperate with the respondents for the purpose of investigation.
- The petitioners shall surrender their passports to the respondents, which shall remain subject to the orders of the jurisdictional court in Chennai.
In the event of arrest during this period, the petitioners shall be released on bail, provided they comply with the above conditions. The Court directed the petitioners to approach the jurisdictional court in Chennai within the 10-day period to seek further relief.
What This Means For Similar Cases
Transit Anticipatory Bail: A Procedural Safeguard
- Jurisdictional Flexibility: This judgment reaffirms that High Courts can grant transit anticipatory bail to accused persons apprehending arrest in another jurisdiction, even in cases involving economic offences under statutes like the CGST Act. Practitioners should note that such relief is not automatic but is granted to enable access to justice.
- Limited Duration: Courts are likely to grant transit bail for short durations (e.g., 10 days) to balance investigative concerns with the accused's right to seek legal recourse. This sets a precedent for time-bound interim relief in similar cases.
Conditions to Mitigate Flight Risk
- Strict Compliance: The Court imposed stringent conditions, including surrender of passports and execution of personal bonds, to address concerns of flight risk. Practitioners must anticipate such conditions and advise clients to cooperate fully with investigations to avoid adverse orders.
- Surety Requirements: The requirement of two sureties for a bond of Rs. 1,00,000 underscores the Court's intent to secure the accused's presence during proceedings. Similar conditions may be imposed in future cases involving high-stakes economic offences.
CGST Act Offences: No Immunity from Bail
- Serious but Bailable: While offences under Section 132 of the CGST Act involve substantial revenue evasion, this judgment clarifies that anticipatory bail is not per se barred. However, Courts may scrutinize the gravity of allegations and impose onerous conditions to prevent misuse.
- Investigative Cooperation: The Court emphasized cooperation with investigations as a key condition. Accused persons must actively engage with authorities to strengthen their bail pleas, particularly in cases involving cross-jurisdictional offences.
Strategic Considerations for Practitioners
- Forum Shopping: Accused persons facing proceedings in multiple jurisdictions may strategically approach High Courts outside the primary jurisdiction for transit bail. However, this judgment underscores that such relief is temporary and conditional.
- Documentary Preparedness: Given the seizure of documents in this case, practitioners should advise clients to maintain meticulous records to demonstrate compliance and cooperation during investigations.
- Jurisdictional Court Approach: The 10-day window granted by the Court is critical. Practitioners must immediately file for anticipatory bail in the jurisdictional court to avoid arrest after the interim period expires.
