The Gujarat High Court ruled on a case involving the cancellation of bail for an accused in a GST fraud matter. The Superintendent of CGST sought to cancel the bail granted to Virbhadrasinh Pratapsinh Chauhan, arguing that he had breached a bail condition by not properly depositing ₹90 lakh required by the bail order. The condition stipulated that the amount be deposited within seven days, but the complainant contended that the accused had only placed the money in his Electronic Cash Ledger without filing Form DRC-03, thus not crediting it to the government exchequer.
The accused countered by providing evidence that the full amount had been debited from his bank account and credited to the government ledger, supported by challans and electronic ledger entries. The court examined whether depositing the amount in the Electronic Cash Ledger without filing the required form constituted a breach of bail conditions.
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Referring to Section 49 of the CGST Act and a previous ruling, the court determined that once an amount is credited to the government through an authorized bank and reflected in the Electronic Cash Ledger, it is deemed as payment to the government. The court found that the accused had complied with the bail conditions by depositing the required amount within the stipulated timeframe and rejected the argument that the accused could reuse the balance. The court dismissed the application for bail cancellation, noting that the technical non-filing of Form DRC-03 did not invalidate the payment made. The accused also provided an undertaking not to claim a refund or utilize the amount, reinforcing the court's decision.
Order Date: 25 September 2025
Case Title: Superintendent (Anti-Evasion), CGST v. Virbhadrasinh Pratapsinh Chauhan & Anr.
Facts:
- The CGST Superintendent sought cancellation of bail granted to the accused for alleged GST evasion and loss to government revenue, claiming breach of bail condition.
- The bail order (25.10.2024) required the accused to deposit ₹90 lakh within seven days.
- The complainant argued that the accused had only deposited the sum in his Electronic Cash Ledger but not debited it via Form DRC-03, and hence it was not credited to the government exchequer.
- The accused countered that the full ₹90 lakh (₹45 lakh each towards CGST and SGST) was debited from his bank account on 01.11.2024 and credited to the government ledger, producing challans and electronic ledger entries to substantiate.
Issue:
- Whether depositing the required amount in the Electronic Cash Ledger without filing Form DRC-03 constitutes breach of bail condition?
Order:
- The Court referred to Section 49 of the CGST Act and the Division Bench ruling in Arya Cotton Industries v. Union of India [2024 (164 Taxmann.com 2) (Guj)], which held that once an amount is credited to the government through an authorised bank and reflected in the Electronic Cash Ledger, it is deemed payment to the government.
- The Court noted that the accused had deposited ₹90 lakh within the stipulated period, and data from 01.04.2024 to 29.11.2024 corroborated that the amount had reached government accounts.
- It rejected the applicant’s contention that the accused could reuse the balance, observing that he had offered an undertaking not to claim refund or utilise the amount.
- Finding no breach of the bail condition, the Court held that mere technical non-filing of DRC-03 does not invalidate payment, and the application for cancellation of bail was dismissed.
