Rajasthan High Court Denies Bail In Alleged ₹95-Crore Online Gaming GST Scam, Flags Foreign Links & Evidence-Tampering Risk

The Rajasthan High Court denied bail to applicants accused of facilitating a racket involving GST evasion of over Rs. 95 Crore, by onboarding certain companies with various online payment aggregators for receipt of online gaming revenues.The bench of Justice Sameer Jain opined that the alleged conduct was a serious white-collar crime with a potential significant impact on the nation's economy. The Court highlighted that the alleged amount of tax evasion far exceeded the threshold of Rs. 5 crores, making the offence cognizable and non-bailable under Section 132(1)(i) of the CGST Act. The petitioners had allegedly facilitated onboarding of multiple companies with online payment aggregators for receipt of large-scale online gaming revenue. The alleged amount collected by these entities was Rs. 90 crore. The Court took note of the fact that during the search operations, the petitioners had admitted to such onboarding for commission. It was further highlighted that there was also some communication with a foreign based individual and such individual was claimed to be a resident of China- HongKong. In this background, and underscoring the fact that the petitioners had come to the Court with unclean hands by hiding the true extent of GST evasion, it was noted that there was a real and demonstrable risk of tampering of evidence, including electronic records, as well as a possibility of absconding, in case the bail was granted. “Therefore, where concealment and deliberate obfuscation of transaction trails are apparent on record, it is neither prudent nor proper to release the accused at the interlocutory stage. Moreover, the possibility of the accused continuing to facilitate or to coordinate with co-accused, domestic or foreign cannot be overlooked. Likewise, the presence of communications with a person who apparently claims foreign residence, the large sums involved and the ease of movement of funds through intermediaries create a realistic and not speculative possibility that the applicants may abscond to defeat prosecution.”Reference was made to the jurisprudence laid down by the Supreme Court in relation to economic offences, and it was observed that cautious approach had to be adopted for granting bail in case of a large scale commercial frauds, especially when the electronic and financial trails were susceptible to tampering. Further, the Court referred to the Apex Court case of Vineet Jain v Union of India in which it was held that in matters of Section 132, CGST, bail should normally be granted except for in extraordinary circumstances. It was held that considering the magnitude of the alleged offence, and the nature of the white-collar crime, coupled with the risk of evidence tampering, the present case was an exceptional situation. Accordingly, the bail applications were rejected. Title: Manoj Kumar v State of Rajasthan and other connected matterCitation: 2025 LiveLaw (Raj) 416Click Here To Read/Download Order

Rajasthan High Court Denies Bail In Alleged ₹95-Crore Online Gaming GST Scam, Flags Foreign Links & Evidence-Tampering Risk

Nupur Agrawal

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Rajasthan High Court Denies Bail In Alleged ₹95-Crore Online Gaming GST Scam, Flags Foreign Links & Evidence-Tampering Risk

Nupur Agrawal

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