Allahabad High Court
ANKIT JOHRI AND ANOTHERversusSTATE OF U.P.
- Decided
- Bench
- ASHUTOSH SRIVASTAVA
Holding
The Court held that the U.P. GST Act does not bar the application of the Bharatiya Nyaya Sanhita provisions and, on prima facie evidence, the applicants are culpable, warranting denial of bail.
Summary
The Allahabad High Court considered a bail application filed by Ankit Johri and Shiva Johri, who were arrested in connection with a GST evasion scheme alleged under the Bharatiya Nyaya Sanhita (BNS). The applicants contended that they were merely data entry operators and that the alleged conduct fell within the purview of the CGST Act, 2017, arguing that the general penal provisions of the BNS should not be invoked. The State argued that the applicants had colluded with the principal accused to create fictitious firms and obtain illicit input tax credit, establishing prima facie culpability. The Court examined the precedent of Govind Enterprises v. State of U.P., which held that special GST statutes do not override penal code provisions, and distinguished the Supreme Court’s decision in Sharat Babu Digumarti. Concluding that the material collected during investigation established the applicants' involvement and that the offences under the BNS are qualitatively different from those under the GST Act, the Court denied bail.
Issues considered
- Whether the conduct alleged against the applicants falls exclusively under the CGST Act, 2017, thereby precluding the application of general penal provisions of the Bharatiya Nyaya Sanhita.
- Whether the provisions of the U.P. GST Act override or bar the invocation of penal code provisions for the same conduct.
- Whether bail should be granted in view of the prima facie evidence of participation in the GST evasion scheme.
Legislation cited
- Bharatiya Nyaya Sanhita, 2023 — s. 318(4), 336(3), 338, 340(2), 3(5), 61(2)
- CGST Act, 2017 — s. 132(1)(b), 132(1)(c)
- U.P. GST Act — s. 131, 132, 135
Subjects
- bail
- GST evasion
- Bharatiya Nyaya Sanhita
- CGST Act
- special statute vs general penal law
- prima facie evidence
- U.P. GST Act
- mens rea
- false invoicing
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
CRIMINAL MISC. BAIL APPLICATION No. - 10225 of 2026
Ankit Johri And Another
.....Applicant(s)
Versus
State of U.P.
.....Opposite
Party(s)
Counsel for Applicant(s) : Avijit Saxena
Counsel for Opposite Party(s) : G.A.
Court No. - 68
HON'BLE ASHUTOSH SRIVASTAVA, J.
Heard Shri Avijit Saxena, learned counsel for the applicants, Shri
Arimardan Yadav, learned AGA for the State and perused the records.
The instant bail application on behalf of the applicants- Ankit Johri and
Shiva Johri has been filed seeking enlargement of applicants in Case
Crime No. 296 of 2025, under Sections 61 (2), 3 (5), 340 (2), 336 (3),
338, 318 (4) of Bharatiya Nyaya Sanhita, 2023, Police Station Jaswant
Nagar, District Etawah, during the pendency of the trial before the Court
below. The bail application in the Court below was rejected by the
learned Special Judge, SC/ST (PA) Act/Addl. Sessions Judge, Court No.
2, Etawah vide order dated 7.3.2026 and the applicants are languishing in
jail since 3.2.2026.
Learned counsel for the applicants while pressing the bail plea has
vehemently argued that the applicants are entirely innocent and have been
falsely implicated in this very case crime number for ulterior motives. The
FIR giving rise to the case crime number, in question, was lodged
nominating one Sudip Kumar Proprietor of M/s Bharat Building Material
with the allegation that the firm is involved in GST evasion by claiming
Input Tax Credit of approx Rs 99,41,957/- in its returns by filing fictitious
inward supply invoices received from Kanpur based firm M/s Lam
Enterprises without any goods movement resulting in revenue loss to the
State to the extent of Rs.2,01,30,000/-. It is argued that the applicants are
not named in the FIR. Their names have been introduced after 5-1/2
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2
months of the lodging of the FIR merely on the basis of inadmissible
statements of co-accused persons. It is argued that the applicants are
freelance GST service providers and tax compliance assistants who aid
small traders and businessman in procedural filing of returns on the GST
portal. The role of the applicants is strictly confined to that of a scribe or
data entry operator who merely upload figures on the GST portal as
dictated by these proprietors for a nominal fee. No mens rea is present to
commit the crime as alleged. The complicity of the applicants is sought to
be established on the strength of the confessional statements of the
applicants and that of co-accused Mohd. Zeeshan. No incriminating
material has been received from the applicants so as to implicate them in
the instant case crime numbers. No money trail has been traced to the
applicants.
Learned counsel appearing for the applicants has vehemently argued that
the allegations levelled against the applicants i.e. issuing invoices without
supply and availing input tax credit falls squarely within the precincts of
Section 132 (1)(b) and (c) of the CGST Act, 2017. The CGST Act, 2017
being a self contained fiscal code, the invocation of general penal law
(BNS) solely to bypass the statutory safeguards of the special statute is
nothing but colourable exercise of power.
Reliance is placed on the decision of the Apex Court in the case of Sharat
Babu Digumarti versus Government of NCT of Delhi reported in 2017
(2) SCC 18 as also a decision of the Hon'ble Madhya Pradesh High Court
in the case of Deepak Singhal versus Union of India (WP No. 21641 of
2024). It is argued that where a Special Act governs a specific field and
sets out a comprehensive scheme of penalties and procedures, the
provisions of the general penal code cannot be invoked merely to bypass
the procedural safeguards of the Special Act.
Learned counsel for the applicants has next argued that the applicants are
respected persons of the society. They have no prior criminal antecedents,
however, the Police have maliciously implicated the applicants in three
other ongoing criminal cases in which also the applicants are not named
but have been arrested. Their criminal antecedents have been explained in
Para 31 of the bail application. The applicants undertake to cooperate in
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3
the trial and shall not misuse the liberty of bail, if released on bail. Hence,
bail has been prayed for.
Per contra, learned AGA has vehemently opposed the bail plea by
submitting that though the applicants have not been named in the FIR
their complicity has been established during the investigation.
Investigation has revealed that the applicants in collusion with the named
accused Sudip Kumar were instrumental in setting up a fictitious firm M/s
Bharat Building Materials using his Aadhar card and PAN card. They also
set up another firm Lam Enterprises Kanpur and have shown fictitious
inward flow of cement into M/s Bharat Building Materials and have
obtained ITC to the tune of two crores one lacs and thirty thousand and
are guilty of committing crime under Sections 61 (2), 3 (5), 340 (2), 336
(3), 338, 318 (4) of BNS. Their bail application is liable to be rejected
out-rightly.
I have heard the learned counsel for the parties and have given my
anxious consideration to the respective submissions.
So far as the submission of learned counsel for the applicants that the
allegations against the applicants i.e. issuing invoices without supply and
availing ITC falls squarely within the precincts of Section 132 (1)(b) and
(c) of the CGST Act, 2017 and the CGST Act being a special statute shall
exclude the invocation of the general penal provisions under Sections 61
(2), 3 (5), 340 (2), 336 (3), 338, 318 (4) of BNS is concerned, the Court is
of the opinion that the precise issue was dealt with by a Division Bench of
this Court in the case of Govind Enterprises versus State of U.P. and 4
others, neutral citation 2019:AHC:99189-DB, which holds the field and
has not been set aside.
Learned counsel for the applicant has tried to argue that the said decision
is per incuriam and distinguishable inasmuch as, it does not consider the
binding decision of the Apex Court in Sharat Babu Digimati (supra). It
is otherwise distinguishable as independent acts of forging i.e. bogus
address, fabricated rent documents, undisclosed bank accounts
constituting distinct IPC ingredients were involved unlike in the case at
hand where there is no allegation of forgery of non GST documents, no
BAIL No. 10225 of 2026
4
identity theft etc. The entire allegations pertain to filing of GST returns,
controlled by the proprietor's OTP authentication placing the dominant
conduct squarely within the GST regime.
The Court is not impressed by the submissions of the learned counsel for
the applicant. In the opinion of the Court, the ratio of the decision of the
Apex Court in Sharat Babu Digimati (supra) would not apply to the case
at hand in view of the express provisions of Sections 131, 132 of the U.P.
GST Act, which itself permits registration of FIR. The phraseology of
Sections 131 and 132 clearly suggests that the provisions of the Act are
without prejudice to the provisions of the Code. The Division Bench of
this Court in Govind Enterprises (supra) after meticulously considering
all aspects of the matter arrived at a conclusion, which is being
reproduced hereunder:-
"Upon careful consideration of the rival submissions, the decisions
noticed above, the relevant provisions of the U.P. Act as also the Penal
Code and the Code, we find that Sections 69, 134, and 135 of the U.P. Act
are applicable in respect of offences punishable under the U.P. Act. They
have no application on offences punishable under the Penal Code.
Further, there is no provision in the U.P. Act, at least shown to us, which
may suggest that the provisions of the U.P. Act overrides or expressly or
impliedly repeals the provisions of the Penal Code. There is also no bar
in the U.P. Act on lodging an FIR under the Code for offences punishable
under the Penal Code even though, for the same act/ conduct, prosecution
can be launched under the U.P. Act. Rather, section 131 of the U.P. Act
impliedly saves the provisions of the Penal Code by providing that no
confiscation made or penalty imposed under the provisions of the Act or
the rules made thereunder shall prevent the infliction of any other
punishment to which the person affected thereby is liable under the
provisions of the U.P. Act or under any other law for the time being in
force.
The argument of the learned counsel for the petitioner that except for
offences specified in sub-section (5) of section 132, sub-section (4) of
section 132 of the U.P. Act renders all offences under the U.P. Act non
cognizable, therefore no FIR can be lodged, is not acceptable, because
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sub-section (4) speaks of offences under the U.P. Act and not in respect of
offences under the Penal Code. It is noteworthy that section 135 of the
U.P. Act makes a significant departure from general law by providing
that in any prosecution for an offence under the U.P. Act, which requires
a cuplable mental state on the part of the accused, the court shall
presume the existence of such mental state. The same does not hold true
for offences punishable under the Penal Code. Hence, to prove mensrea,
which is one of the necessary ingredients of an offence punishable under
the Penal Code, the standard of proof would have to be higher to prove
commission of an offence punishable under the Penal Code than what
would be required to prove an offence punishable under the U.P. Act. As
such, the offences punishable under the Penal Code are qualitatively
different from an offence punishable under the U.P. Act."
The Division Bench decision of this Court still holds the field and is
binding upon this Court. The decision of the Hon'ble Madhya Pradesh
High Court, however, has only persuasive value and is not a binding
precedent.
In the case at hand, the culpability of the applicants in the commission of
crime stand established prima facie from the material collected during
investigation. The applicants along with co-accused Sudip Kumar
utilizing his Aadhar Card and PAN card created M/s Bharat Building
Materials a fictitious, non existing bogus firm and by showing false e-way
inward bills from another bogus firm created using the Broad Band
Internet Connection of Ankit Johri, namely, M/s Lam Enterprises
showing outward E-way bills for supply of cement without the goods
being transferred in physical form and tax to the time of Rs.two crores
one lacs thirty thousand has been evaded.
In view of the above, the Court is not inclined to release the applicants on
bail at this staged. Rejected.
(Ashutosh Srivastava,J.)
April 16, 2026
Ravi Prakash
Digitally signed by :-
RAVI PRAKASH
High Court of Judicature at Allahabad
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