Pending GST Fraud Case No Ground To Restrict Passport Renewal To Three Years: Delhi High Court

The Delhi High Court on 20 August held that the pendency of a criminal case concerning alleged Goods and Services Tax fraud cannot justify restricting an accused person's passport renewal to three years when sufficient safeguards prevent him from leaving India without the Court's permission.

Justice Saurabh Banerjee modified the trial court's order limiting Atul Modi's passport renewal to three years and directed that his passport be renewed for the regular term of ten years. He held:

“There are sufficient safeguards/ measures to keep a check on the petitioner though he may be the holder of a valid Passport, and the term of renewal thereof, be it for a limited period of three years or regular term of ten years, is immaterial, since the said safeguards/ measures would apply under all situations.”

The Court was hearing a petition filed by Modi, who faces prosecution under Section 132(1)(c) of the Central Goods and Services Tax Act, 2017, concerning allegations that a company of which he was a Director claimed ineligible input tax credit of approximately Rs. 7.72 crore on the basis of fictitious purchase invoices.

Modi was arrested in November 2020 and subsequently granted bail on the condition that he would not leave the country without the Court's permission. He was also required to deposit his passport with the investigating officer.

In February 2024, the trial court released his passport, observing that the authorities could not deprive him of it indefinitely merely to secure his presence and that suitable conditions could ensure his appearance.

As Modi's passport was due to expire in March 2026, he approached the trial court seeking its renewal for the regular term of ten years. The trial court partly allowed his application and permitted renewal for three years, subject to the condition that he would not travel abroad without the permission of the concerned Court.

Challenging the restriction before the High Court, Modi argued that repeatedly approaching the Court for passport renewal would cause him undue hardship, particularly because his business required frequent overseas travel for exhibitions, meetings and conferences. He also submitted that he had previously travelled abroad with the Court's permission without violating any bail condition.

The Directorate General of Goods and Services Tax Intelligence opposed the plea, contending that the alleged loss to the government exchequer was approximately Rs. 7.72 crore and that Modi had deposited only Rs. 7 lakh, creating a possibility of him absconding.

The Bench, however, noted that Modi could travel abroad only after obtaining prior permission from the Court. It also noted that the trial court had directed the investigating officer, immigration authorities and the Foreigners Regional Registration Office to ensure compliance with this restriction.

Accordingly, the High Court modified the trial court's order and directed that Modi's passport be renewed for the regular term of ten years.

For Petitioner: Mr. Abhishek Gautam and Mr. Mohit Singhal, Advs

For Respondent: Mr. Harpreet Singh, SSC with Mr. Jatin Kumar Gaur, Adv.