HC Grants Anticipatory Bail in Wrongful ITC Case Citing Double Jeopardy

Case Details: Dheeraj Gupta vs. State of Madhya Pradesh [2026] 182 taxmann.com 595 (Madhya Pradesh)

Judiciary and Counsel Details

• Sandeep N. Bhatt, J.
• Sankalp Kochar, Adv. for the Appellant.
• A. Rajeshwar Rao, Adv. for the Respondent.

Facts of the Case

The applicant filed an anticipatory bail application apprehending arrest for alleged wrongful utilisation of input tax credit (ITC). He submitted that he had already been arrested in a connected proceeding initiated by the office of the Director General of GST Intelligence (DGGI), and therefore, prosecution on the same count of allegation could not be permitted to continue. It was contended that the alleged amount, if exceeding Rs. 5 crores, attracts a maximum sentence of five years, and that the offence could be compounded under Section 138 of the CGST Act either before or after prosecution. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the applicant had already faced one proceeding pursuant to action initiated by the office of the DGGI, and therefore, again prosecuting him on the same count of allegation would amount to double jeopardy. The court observed that the maximum sentence for the alleged amount, if exceeding Rs. 5 crores, is five years, and that the possibility of compounding under Section 138 of the CGST Act could not be ruled out. It further held that custodial interrogation was not warranted and that detaining the applicant would adversely affect his business.

List of Cases Referred to

• Arnab Ranjan Goswami v. Union ofIndia (2021) 1 SCC 1 (para 4)
• Amitbhai Anilchandra Shah v. CBI (2013) 6 SCC 348 (para 4)
• T.T. Antony v. State of Kerala (2001) 6 SCC 181 (para 4)
• Sri Akram Pasha v. Senior Intelligence Officer DGGI [2026] 182 taxmann.com 48 (Karnataka) (para 6)
• Sharat Babu Digumarti v. Government of NCT of Delh (2017) 2 SCC 18 (para 7)
• Deepak Singhal v. Union of India [2024] 167 taxmann.com 222 (Madhya Pradesh) (para 7)
• Sushil Kumar Singla v. State of UT Chandigarh [CRM – M 28701/2023 (O & M)] (para 7)
• Shalini Singhal v. State of MP [M.Cr.C. No. 5759 of 2024, dated 9-2-2024] (para 7)
• Sushila Aggarwal v. State (NCT of Delhi) (2020) 5 SCC 1 (para 16).