CRL.M.C. 1242/2021 Page 1 of 16

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Reserved on: 10

th

November, 2025

Pronounced on: 12

th

January, 2026

+ CRL.M.C. 1242/2021

CGST, DELHI WEST

Through

Shri Pankaj Verma,

Intelligence Officer,

New Delhi …….Petitioner

Through: Mr. Gagan Vaswani, Advocate and

Mr. Satish Aggarwala, Senior

Standing Counsel.

versus

VISHAL GOYAL

S/o Shri Kishan Goyal

House No.2273, Hudson Line,

Mall Road, Kingsway Camp,

G.T.B. Nagar,

Delhi 110009 ……Respondent

Through: Mr. Shadman Ahmed Siddiqui and

Mr. Vaibhav Prasad Singh,

Advocates.

CORAM:

HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA

J U D G M E N T

NEENA BANSAL KRISHNA, J.

1. Petition under Section 482 of the Code of Criminal Procedure, 1973

(hereinafter referred to as „Cr.P.C.‟), has been filed on behalf of the

Petitioner/CGST, West Delhi challenging the Order dated 17.03.2021 of

the learned CMM and seeking cancellation of Bail granted to Vishal Goyal,

the Respondent.

CRL.M.C. 1242/2021 Page 2 of 16

2. The brief facts of the case are that on 29.12.2020, an information was

received about an unregistered unit of gutka factory running at CR place,

Rohini, Sector 20, Delhi and that this unregistered Unit had more than 10

speed manufacturing machines, which were working 24x7 at the top floor of

the premises and around 40-50 labourers were working. The finished goods

were being supplied to Chhattisgarh and Odisha. The raid was conducted

under Section 67(2) of the CGST Act, 2017 on 01.01.2021. During the

search, the premises was found covered in dust, with a strong pungent smell

emanating from several wall machines operating in the right-side hall on the

second floor. Fourteen gutka pouch making machines were functioning in

the hall.

3. 75 labourers were found working and were engaged in different

activities like pouring filled plastic bags into machine hoppers, collecting

pouches and making multi-pouch packs, etc. On being asked about the 60-70

plastic bags kept near 14 machines, Supervisor Manoj alias Meghraj told the

CGST Officers that these bags contained ready-to-pack feed for the pouch

making machines, while the bigger bags on the outer side contained ready-

to-dispatch material. The material being packed in the pouches was Gutka,

branded as “Suhana Pasand” and “SHK,” which was written on the

pouches.

4. Manoj further disclosed that the left-side hall on the second floor,

was used to store raw materials like Kattha, Supari, perfume tins, etc. On the

third floor, there was a small room which housed a mixing machine for

mixing the ingredients for mixing gutka. He disclosed that the premises

belonged to Ranbir Singh, but the business was operated by A.K. Yadav with

the help of Vishal Goyal. The team also met Rohit, who was a friend of A.K.

CRL.M.C. 1242/2021 Page 3 of 16

Yadav. During the search, Manoj was unable to produce any stock records.

The documents and mobile phones were taken for investigation. Since no

stock register was available, the Officers seized goods as per Form GST

INS-02. Copy was given to Pradeep with instructions for safe custody.

Incriminating documents and diary, were seized.

5. Detailed Statements of various labourers, were recorded. Rohit, who

was found present in the premises, stated that he is a labour contractor and

proprietor of Om Sai Enterprises (GSTINs in Delhi and Haryana). He had

Accounts in HDFC, Kotak, and Axis Bank, and his Haryana Firm did Supari

cutting on commission. He further disclosed that he and Mr. A.K. Yadav,

had earlier worked together at Shikhar Pan Masala but had no business

partnership.

6. The CGST Team visited the house of Ranbir Singh and served him

the Summons. His son, Mr. Pradeep Kumar, who received the Summons

stated that the premises had been rented out to Avdhesh Kumar for gutka

manufacturing, and that all the setup was arranged by Avdhesh Kumar.

7. The Statement of the Respondent Vishal Goyal was recorded on

15.02.2021 wherein he admitted being involved in the manufacture of Gutka

and Pan Masala under the brand name ‘Suhana Pasand’ and that his other

Firm M/s Balaji Traders dealt in supari trading. He disclosed that he first

met Avdhesh Kumar in 2013 at his Raipur Tobacco Unit, Raja Perfume, for

labour supply, and later, met him again in June 2019, after which they had

started manufacturing Suhana Pasand Gutka at Plot No. 26, C.R. Palace,

Budh Vihar, Delhi. According to him, Avdhesh Yadav handled all the work

relating to receipt of inputs, production, labour, packaging, and sale of SHK

brand Gutka, which was supplied in Chhattisgarh and other regions. He also

CRL.M.C. 1242/2021 Page 4 of 16

stated that Avdhesh was paid Rs.1.5 lakhs per month. He admitted he knew

Gutka manufacturing was banned across India. He further revealed that he

and Avdhesh invested around Rs.50 lakh of the illegally earned money from

this Gutka business into starting a cold storage venture in Uttar Pradesh.

8. Statement of Avdhesh Kumar was recorded on 15.02.2021 wherein

he confirmed and acknowledged that he was aware of Gutka manufacturing

be illegal.

9. In the subsequent Statement of Rohit recorded on 15.02.2021, he

disclosed that he knew Vishal Goyal (Respondent) for two years and that

Firm Om Sai Enterprises was actually opened by Vishal Goyal in his name

and all transactions were done by him, who had placed Aakash, his trusted

man, to handle the work.

10. During the investigations, it was found that Vishal Goyal, the

Respondent, had created a network of multiple Firms, including M/s

Lambodar Buildwell Pvt. Ltd., to launder money earned from illegal Gutka

manufacturing and sales.

11. This was supported by the voluntary statement of Rohit Srivastava

recorded on 12.01.2021, who admitted that Vishal Goyal had transferred

Rs.13 Lakhs from Lambodar Buildwell Pvt. Ltd., to his Axis Bank Account

to help him to purchase a Creta car, which was meant for use and benefit of

Avdhesh Yadav, who was operating the illegal Gutka Factory for Vishal

Goyal.

12. As no bills or invoices were found, the Department applied the Best

Judgment Assessment Clause. The Department calculated approximate

Custom Duty evasion by the unregistered Gutka/Pan Masala/Tobacco

manufacturers based on the seized finished goods for a 16-month period,

CRL.M.C. 1242/2021 Page 5 of 16

using the applicable combined duty rate of 198.5%, as recorded during the

search conducted on 01.01.2021. 87,51,336 pouches seized during the

search on 01.01.2021, was multiplied with Rs. 4/-. The total Value of the

Gutka pouches, was calculated as Rs.3,50,05,344/-. The reverse duty was

calculated and it came to Rs.1.73 Crores duty for one day.

13. The duty evasion in respect of Avdhesh Kumar and Vishal Goyal, for

16 months, was calculated as under:-

one day duty (calculations provide

din detail)

17327645.28 approx.

So, one-month duty (i.e. 30 days) 519829358.4 approx.

16-month duty 8317269734 approx.

14. While the challenged this calculation, the Department asserted that the

calculation was made only for 16 months, whereas the evidence including

the voluntary statement of Vishal Goyal, dated 15/16.02.2021 and that of

Avdhesh Kumar and Manoj Kumar’s Statement dated 01.01.2021, reflected

that manufacture of sale and Gutka, was ongoing for nearly 36 months.

Since Gutka is a banned activity, which was being carried out secretly, there

were no purchase or sales records being maintained. The production and

sales were thus, computed on a pro-rata basis using daily production

capacity. Vishal Goyal had thus, committed acts, which came under Section

132(1)(a) of the CGST Act read with Section 20 of the IGST Act, which are

cognizable and non-bailable offences under Section 132(5).

15. Respondent was arrested on 16.02.2021 with the Commissioner’s

approval and thereafter, remanded to Judicial Custody. His Bail Application

was allowed Bail vide Order dated 17.03.2021 by learned CMM, New Delhi.

CRL.M.C. 1242/2021 Page 6 of 16

16. The Department being aggrieved by the Bail Order, has filed the

present Petition to challenge the same on the ground that there was an

evasion of duty of approximately Rs. 831.72 Crores in 16 months. The Bail

had been granted within 29 days of custody despite the seriousness of the

offense, considering that manufacturing and sale of Gutka was prohibited in

Delhi. The Respondent owned the „Suhana Pasand‟ brand since August

2011, with no proof of closure. In his voluntary Statement dated 15.02.2021

under Sections 70 and 174 of CGST Act 2017, he admitted to clandestine

manufacturing and supply of Gutka with the assistance of Avdhesh Kumar

Yadav and Sudheer Gupta. Suhana Pasand pouches were recovered during

the search of his residence on 15.01.2021. The premises owner, Shri Ranbir

Singh also knew Avdhesh Kumar, who had set up the factory for and on

behalf of the Respondent.

17. It is submitted that considering the huge revenue involved, the

liability of the Respondent, cannot be reduced unless evaded duty is repaid

to the Government, which he had assured in his Statement dated 15.02.2021.

18. It is further submitted that there were reasonable grounds to believe

that the Respondent would tamper with evidence and create false evidence,

if granted Bail.

19. The Respondent had absconded for over a month. His residence was

searched on 15.01.2021 and his wife was summoned for 18.01.2021, but she

claimed ignorance about his whereabouts. The Respondent appeared on

15.02.2021 on receiving Summons under Section 70 of the CGST Act, 2017

but such appearance cannot be deemed as voluntary. No retraction was

reported by the Department or Special Public Prosecutor. When his

Statement was recorded on 27.02.2021 in Jail, he did not inform the Officers

CRL.M.C. 1242/2021 Page 7 of 16

or record any retraction of his earlier Statement, indicating an afterthought

based on legal advice.

20. Further, the Respondent did not cooperate in the investigations as he

failed to deposit Government dues and provide information about other

culprits, identify delivery routes and destinations, explain collection and

recovery of proceeds or provide lead to Sudhir Gupta.

21. The investigations were at the initial stage; in such economic

offences, the grant of Bail, has been deprecated by this Court in Crl. M.C.

No.187/2014 dated 26.03.2014. Socio-economic offences require different

treatment in Bail matters as they involved deep-rooted conspiracies affecting

society’s moral fiber and cause irreparable harm, as held in the case of State

of Bihar & Another vs. Amit Kumar, (2017) 13 SCC 751. Reliance has also

been placed on the Case of Vinod Bhandari vs. State of M.P., 2015 Cri. LJ

1547 and Ram Narain Popli vs. CBI, AIR 2003 SCC 3257.

22. Further, Reliance is also placed on Nimmagadda Prasad vs. CBI,

Criminal Appeal No. 728/2013, decided on 09.05.2013; State of

Maharashtra vs. Nainmal Punjaji Shah; Toofan Singh Vs. State of Tamil

Nadu, Crl. Appeal No.152/2013; K.I. Pavunny vs. Asstt. Collector, Central

Excise, 1997 (90) ELT 241 (S.C.); Commissioner of Central Excise,

Mumbai vs. Kalvert Foods India Pvt. Ltd.; Malwinder Mohan Singh vs. State

of NCT of Delhi, decided on 10.08.2020 (DHC); Vimal Yashwant Giri

Goswami vs. State of Gujarat, R/Special Civil Application No.13679/2019,

decided on 20.10.2020 by the Hon’ble Gujarat High Court; P. Chidambaram

vs. Enforcement of Directorate, Criminal Appeal No.1340/2019, decided by

the Apex Court on 05.09.2019.

CRL.M.C. 1242/2021 Page 8 of 16

23. It is, therefore, submitted that the Bail granted vide Order dated

17.03.2021, be recalled.

24. The Respondent in his Reply asserted that the present Petition for

cancellation of Bail, is devoid of merits and is misplaced in law and is liable

to be dismissed in limine. He denied all the allegations, averments made in

the Application.

25. The preliminary submissions are that he had been enlarged on Bail

vide Order dated 17.03.2021 of learned CMM, which is a well-reasoned and

legally tenable Order and does not suffer from any illegal infirmity. While

granting Bail, the learned CMM had considered his period of custody of

almost one month and had also noted the figure of Rs.831.72 Crores as

alleged by the Petitioner Department to be an imaginative figure. Learned

CMM also observed that documentary evidence was already in possession

of the Department and nothing more was required to be recovered from the

Respondent. Further, the Respondent was not the main accused and had

clean antecedents. After considering all the relevant material, the Bail has

been rightly granted to the Respondent. Reliance is placed on Prabhakar

Tewari vs. State of U.P. & Anr., SLP (Crl.) 9207/2019

26. It is asserted that the entire Case of the Petitioner/Department hinges

on the Statements of the individuals recorded during the investigations. The

veracity and authenticity of such Statements has to be tested during the trial.

Aside from the Statements, no concrete or incriminating material exists

against the Respondent. Insofar as, the Statement of the Respondent is

considered, he had retracted his Statement through the Superintendent, Tihar

Jail. Furthermore, it has no evidentiary value in view of the dicta laid by the

Hon’ble Supreme Court of India in Toofan Singh vs. The State of Tamil

CRL.M.C. 1242/2021 Page 9 of 16

Nadu, Crl. Appeal No. 152/2013, decided on 29.10.2020 wherein it was held

that confessional Statement made before an Officer designated under

Section 42 or Section 53, can be a basis to convict a person under NDPS

Act, without any non obstante clause doing away with Section 25 of the

Evidence Act. Therefore, no salutary purpose would be served by keeping

the Respondent in Jail.

27. It is further contended that the alleged Tax evasion of Rs.831.72

Crores calculated by the Petitioner/Department, is absurd as it is ex-facie

baseless and purely imaginative. The falsity of the figure is apparent from

the alleged calculations made by the Petitioner/Department on assumptions,

hunches, whims and fancies. The Petitioner is not in possession of any

Invoices, details of the buyers to whom the Gutka(s) had been sold, ledgers,

Bank Statements or any other document to show that the payments had been

made by the buyers as alleged by the Petitioner. The figure of Rs.831 Crores

is wholly delusional.

28. The investigations were initiated by the Petitioner on 01.01.2021 and

the same is still pending. The Petitioner had already given the Statements

and the documents have been seized during the raid. The Police custody of

the Respondent was never sought nor any recovery was to be made from

him. Even when he was in judicial custody, his presence was never sought

by the Department for any recovery or discovery. The co-accused, Manoj

and Avdesh Kumar have been granted statutory Bail on 06.03.2021 and

19.04.2021 respectively by the learned CMM.

29. It is further submitted that the Respondent had wound up his business

under the name of Suhana Pasand in 2013. However, the co-accused, Mr.

Avdhesh Kumar misused the name by manufacturing and clandestine supply

CRL.M.C. 1242/2021 Page 10 of 16

of Gutka. The Respondent had nothing to do with the business being run

from Rohini, Sector-20, New Delhi. There is no concrete or incriminating

document connecting the Respondent to the alleged premises or proving his

involvement in the alleged business.

30. Furthermore, the Statements of several persons recorded during the

investigation indicate that not only Mr. Avdhesh Kumar Yadav, is

mastermind behind the alleged illegal activity, it was he who took the

premises in question for rent. It was Avdhesh Kumar Yadav, who was

involved in manufacturing of pan masala/gutka and the Respondent had no

involvement whatsoever in it.

31. Reliance is also placed on Arnesh Kumar vs. State of Bihar &

Another, 2014 8 SCC 273 to say that the arrest must not be made casually

and mechanically. There is no violation of the Bail condition by the

Respondent. Indirectly, the Petitioner is seeking cancellation of Bail, which

is not maintainable in law.

32. Furthermore, it has been held in various Judgments by the Apex Court

and the High Court that once a Bail has been granted, it should not be

cancelled in a mechanical manner, without considering whether any

supervening circumstances have rendered it no longer conducive to a fair

trial to allow the accused to retain his freedom by enjoying the concession of

Bail during the trial. Bail cannot be cancelled merely on a request of the

Complainant or investigating agency unless it is established that it has been

misused and is no longer conducive in the interest of justice to allow the

accused to remain on Bail.

CRL.M.C. 1242/2021 Page 11 of 16

33. Reliance is placed on X vs. State of Telangana & Anr., (2018) 16 SCC

511; Dolan Ram vs. State of Haryana, (1955) 1 SCC 349 and Directorate of

Enforcement vs. Ratul Puri, 2020 SCC OnLine Del 97.

34. It is submitted that the instant case is not a one where the cancellation

of Bail is justified.

35. On merits, all the assertions made in the Application, have been

denied. It is further submitted that the Statement of the Respondent before

the Investigating Agency on 15.02.2021, was made under threat, pressure,

duress for which, he had made a comprehensive retraction through the

Superintendent, Tihar Jail and thus, the same cannot be relied upon. This

fact has also been recorded by the learned CMM in its Order dated

17.03.2021.

36. It is, therefore, submitted that the present Bail Application is without

merits and is liable to be dismissed.

Submissions heard and the record perused.

37. The Petitioner/CGST Delhi West seeks recall of the Order dated

17.03.2021 granting Bail to Respondent No.2/Vishal Goyal on the grounds

that, firstly, the offence is a serious economic offence involving clandestine

manufacture and sale of banned gutka with alleged GST evasion of about

Rs. 831.72 Crores. Secondly, the offence under Section 132 CGST Act is

cognizable and non-bailable, and the learned CMM failed to appreciate the

gravity and societal impact of the offence. Thirdly, Respondent No.2 had an

active and central role in the illegal activity, including ownership of the

brand and laundering of proceeds. Fourthly, there is a real apprehension of

tampering with evidence and influencing witnesses, as the investigation is

CRL.M.C. 1242/2021 Page 12 of 16

still ongoing. Lastly, the Respondent had absconded and did not cooperate

with the investigation, warranting recall of the Bail in the interest of justice.

38. Before considering the contentions on merit, it is significant to

understand the distinction between challenging the Bail Order on merits and

cancellation of Bail. While recall can be made only if it is established that

Bail has been granted by not considering the relevant facts on merits,

cancellation is prompted by subsequent events and violation of terms of

Bail by the Respondent.

39. The Apex Court in Y vs. State of Rajasthan, (2022) 9 SCC 269

underscored that an order granting bail can be tested on illegality, perversity,

arbitrariness and being based on unjustified material. While setting aside

the order granting bail, the Court made the following observations

highlighting the distinction between recall and cancellation of bail:

“15. It is worth noting that what is being considered in this

case relates to whether the High Court has exercised the

discretionary power under Section 439CrPC in granting bail

appropriately. Such an assessment is different from deciding

whether circumstances subsequent to the grant of bail have

made it necessary to cancel the same. The first situation

requires the Court to analyse whether the order granting

bail was illegal, perverse, unjustified or arbitrary. On the

other hand, an application for cancellation of bail looks at

whether supervening circumstances have occurred

warranting cancellation.

16. In Neeru Yadav vs. State of U.P. (2014) 16 SCC, Apex

Court held as follows:

“12. ….It is well settled in law that cancellation of bail

after it is granted because the accused has

misconducted himself or of some supervening

circumstances warranting such cancellation have

CRL.M.C. 1242/2021 Page 13 of 16

occurred is in a different compartment altogether than

an order granting bail which is unjustified, illegal and

perverse.

If in a case, the relevant factors which should have

been taken into consideration while dealing with the

application for bail have not been taken note of, or bail

is founded on irrelevant considerations, indisputably

the superior court can set aside the order of such a

grant of bail. Such a case belongs to a different

category and is in a separate realm. While dealing with

a case of second nature, the court does not dwell upon

the violation of conditions by the accused or the

supervening circumstances that have happened

subsequently. It, on the contrary, delves into the

justifiability and the soundness of the order passed by

the court.”

40. This distinction is succinctly brought forth in the case of Mahipal vs.

Rajesh Kumar @ Polia and Anr., (2020) 2 SCC 118, wherein the Apex

Court observed that the considerations that guide the power of an Appellate

Court in assessing the correctness of an order granting Bail stand on a

different footing from an assessment of an application for the cancellation of

Bail. The correctness of an order granting Bail is tested on the anvil of

whether there was an improper or arbitrary exercise of the discretion in the

grant of bail. The test is whether the Order granting Bail is perverse,

illegal or unjustified.

41. In recent judgement of Ashok Dhankad vs. State of NCT of Delhi and

Another, 2025 SCC OnLine SC 1690, Apex Court reiterated that while

considering as to whether bail ought to be granted in a matter involving a

serious criminal offence, the Court must consider relevant factors like the

nature of the accusations made against the accused, the manner in which

CRL.M.C. 1242/2021 Page 14 of 16

the crime is alleged to have been committed, the gravity of the offence, the

role attributed to the accused, the criminal antecedents of the accused, the

probability of tampering of the witnesses and repeating the offence, if the

accused are released on Bail, the likelihood of the accused being

unavailable in the event bail is granted, the possibility of obstructing the

proceedings and evading the courts of justice and the overall desirability of

releasing the accused on Bail.

42. Apex Court has succinctly explained and summarized the factors for

consideration for setting aside of Bail Orders as under:

“19. The principles which emerge as a result of the

above discussion are as follows:

(i) An appeal against grant of bail cannot be

considered to be on the same footing as an application for

cancellation of bail;

(ii) The Court concerned must not venture into a

threadbare analysis of the evidence adduced by prosecution.

The merits of such evidence must not be adjudicated at the

stage of bail;

(iii) An order granting bail must reflect application of

mind and assessment of the relevant factors for grant of bail

that have been elucidated by this Court.

(iv) An appeal against grant of bail may be entertained

by a superior Court on grounds such as perversity; illegality;

inconsistency with law; relevant factors not been taken into

consideration including gravity of the offence and impact of

the crime;

(v) However, the Court may not take the conduct of an

accused subsequent to the grant bail into consideration while

considering an appeal against the grant of such bail. Such

grounds must be taken in an application for cancellation of

bail; and

CRL.M.C. 1242/2021 Page 15 of 16

(vi) An appeal against grant of bail must not be allowed

to be used as a retaliatory measure. Such an appeal must be

confined only to the grounds discussed above.”

43. The circumstances and consideration of both is therefore, distinct and

must not be confused, when the Bail Order is sought to be recalled. The

present case is of the former category wherein Bail granted vide Order dated

17.03.2021, is sought to be recalled on the ground of the discretion having

been erroneously exercised in favour of the Respondent.

44. The learned CMM after due consideration of the relevant factors

governing grant of Bail, has exercised the discretion judiciously. A perusal

of the impugned Order dated 17.03.2021 shows that the learned CMM has

taken note of the nature of allegations, the role attributed to the Respondent,

the period of custody undergone, the stage of investigation and the material

collected by the Department.

45. The contention of the Petitioner regarding the alleged duty evasion of

Rs. 831.72 crores was expressly noted by the learned CMM, who found that

prolonged incarceration was not warranted solely on the basis of such

allegation, particularly when the computation was based on assumptions and

the investigation was documentary in nature.

46. It cannot be overlooked that the evidence is essentially

documentary/electronic and there is no likelihood of the same being

tampered by the Respondent after having been admitted to Bail. There is

nothing to show that he is a flight Risk or there is any likelihood of his

influencing the witnesses or tampering the evidence.

47. Furthermore, it cannot be ignored that the Bail was granted vide Order

dated 17.03.2021 and there is no averment of any misuse or abuse of the

CRL.M.C. 1242/2021 Page 16 of 16

liberty of Bail as granted to the Respondent. There is no ground which is

existing to show that the discretion of grant of Bail has not been exercised

judiciously by the learned CMM or that there is any misuse or abuse of

liberty so granted by the Respondent. There is also nothing on record to

show that the trial has been hampered on account of grant of Bail.

48. Thus, there is no merit in the present Petition for setting aside of the

Bail Order dated 17.03.2021.

49. The Petition is hereby, dismissed along with pending Applications(s),

if any.

(NEENA BANSAL KRISHNA)

JUDGE

JANUARY 12, 2026/RS