The Allahabad High Court has granted bail to Kumar Manish, CEO and director of SRS Live Technologies Private Limited, which operates payment platform SabPaisa, in a case initiated by the Directorate General of Goods and Services Tax Intelligence (DGGI) under the Central Goods and Services Tax Act, 2017.
The case concerns payments involving certain online gaming merchants that were processed through a payment gateway and an escrow account. The DGGI alleged that funds received in the escrow account were diverted to five companies in which Manish was an owner or director.
The defence disputed the allegations, arguing that the evidence did not establish the alleged offences under Sections 132(1)(a) and 132(1)(f) of the CGST Act. It also submitted that the material collected during the investigation was documentary in nature. The press release states that the DGGI submitted that, at most, the offence of abetment was made out against Manish.
Court cites completed investigation, likely delay in trial
While granting bail, the High Court noted that the investigation had been completed and the complaint filed before the Special Chief Judicial Magistrate in Meerut. The court also took into account that no charge had been shown to have been framed, Manish had no previous criminal history, and the offences were triable by a magistrate with a maximum punishment of five years.
The court further observed that the trial was unlikely to conclude within next one year. It noted that no material had been placed before it to indicate that Manish was likely to tamper with evidence, intimidate witnesses or otherwise obstruct the course of justice.
Referring to Supreme Court decisions concerning bail, personal liberty, the presumption of innocence and the right to a speedy trial, the High Court reiterated that detention before trial is not intended to operate as punishment.
The court held that Manish had made out a case for bail after considering the nature of the alleged offence, the evidence, the submissions of both sides and the period of detention. It clarified that it was not expressing any opinion on the merits of the case.
“We respect the Court’s order and will continue to cooperate fully with the legal process,” said Manish Kumar, CEO, SabPaisa.
Bail order comes amid proposed changes to GST prosecution provisions
Separately, the GST Council, at its 57th meeting on October 8, recommended changes to GST prosecution provisions, including the proposed omission of Section 69 of the CGST Act, raising the prosecution threshold from ₹1 crore to ₹5 crore, and rationalising certain offences and punishments under Section 132. The process-related reforms recommended at the meeting are set to take effect from April 1, 2027.
The proposed changes are yet to be implemented. The process-related reforms recommended at the meeting are set to take effect from April 1, 2027.
The bail order does not amount to a determination of the allegations on their merits. The proceedings will continue in accordance with law.
Justice Vikram D. Chauhan passed the order. Manish had been in judicial custody since April 17.
