2026-VIL-990-P&H
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SGST High Court Cases

GST - Bail Application – Fraudulent Availment of Input Tax Credit – Petitioner arrested on allegation of claiming input tax credit in illegal manner without actual transaction of goods, causing huge loss to the State Exchequer on basis of fake invoices. Petitioner in custody for approximately four months. Petitioner contended that all purchases and supplies were supported by valid tax invoices and delivery challans with payments through banking channels. Petitioner also alleged that grounds of arrest and order under Section 69 of CGST Act were not communicated to him – Whether Petitioner is entitled to bail in case involving alleged fraudulent availment of input tax credit considering principles governing bail in economic offences, violation of fundamental rights, and right to speedy trial – HELD – Arrest must proceed on belief supported by reasons relying on material and not on suspicion alone. Once a Court finds that fundamental rights under Articles 21 and 22 of Constitution have been violated while arresting the accused, it is the duty of the Court to release the accused on bail as the arrest stands vitiated. The benefit of bail cannot be denied merely on severity of offence. The primary purposes of bail are to release the accused of imprisonment, to release the State of burden of keeping him pending trial, and to keep the accused constructively in custody to ensure submission to jurisdiction of the Court - Petitioner has already undergone custody for approximately four months, has clean antecedents, maximum punishment is five years, entire evidence is documentary in nature and detention in judicial custody is not likely to serve any purpose. There is nothing on record to show that while on bail Petitioner will tamper with evidence or influence witnesses or will not cooperate in trial – Petitioner is entitled to benefit of bail. The petitioner is ordered to be released on bail on furnishing personal bond and surety bond subject to conditions including not making inducement or threat to any person, notifying change of address to trial Court, and not leaving India without prior permission of trial Court – The petition is allowed
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