SC quashes Bombay HC order granting interim protection to Sunil Biyani

The apex court ruled that the High Court could not grant protection from a possible future arrest after finding Biyani's anticipatory bail application to be premature

The Supreme Court on Wednesday quashed a Bombay High Court order granting interim protection from arrest to Future group Non-Executive Dbhairector Sunil Biyani in connection with an alleged ₹1,200 crore goods and services tax (GST) evasion case.

 

A Bench of Justices Dipankar Datta and Sheel Nagu held that the HC could not provide Biyani protection from arrest after concluding that his anticipatory bail plea was premature.

 

The Bombay HC had earlier found that Biyani’s pre-arrest bail application could not be considered at that stage as GST authorities had not issued an arrest order under Section 69 of the Central GST Act. However, it had directed that if such an order was subsequently passed, Biyani would not be arrested for seven days after being informed about it.

   

The Centre challenged this direction, arguing that a court cannot simultaneously hold an anticipatory bail plea premature and grant interim protection against a possible future arrest.

 

The SC agreed and set aside the portion of the HC order granting the seven-day protection.

 

At the same time, the SC Bench said GST authorities must properly communicate any arrest order to the person concerned. It noted that GST registrants are required to furnish email addresses under the applicable rules and such communication could, therefore, be made electronically.

 

The case originated from summons issued by the Directorate General of GST Intelligence (DGGI) to Biyani as part of its investigation into alleged fake invoicing and wrongful availment of input tax credit.

 

According to DGGI, the alleged transactions involved more than ₹200 crore in GST implications. The probe also covered foreign remittances of ₹1,208.77 crore, involving a purported GST liability of around ₹217.57 crore, besides approximately ₹50 crore in allegedly ineligible input tax credit (ITC).

 

The agency alleged that around ₹664.70 crore in remittances passed through Alphaneon Studioz and Pindflix Entertainment, companies where Biyani was a director. It further alleged that Alphaneon had claimed around ₹20 crore in ineligible ITC based on invoices issued by suppliers later found to be non-existent or not operating at their registered premises.

 

The DGGI had argued that the scale of the alleged tax evasion, the use of layered transactions and the availability of electronic evidence warranted custodial interrogation.

 

Biyani, however, maintained that he had resigned from the concerned company in July 2023 and had communicated his resignation by email. He claimed that fraudulent company filings had wrongly implicated him and denied any involvement in the alleged tax evasion. He also said he was willing to cooperate with the probe and respond to DGGI’s summons in writing.

 

A detailed copy of the SC judgment is awaited.