2026-VIL-1217-AP
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SGST High Court Cases

GST - Cancellation of bail granted in alleged fake Input Tax Credit racket involving fictitious firms - Challenge to the order granting regular bail as perverse - Section 132(1)(i) of the CGST Act, 2017 - Petitioner, the investigating agency, sought under Sections 483(3) and 528 of the BNSS to set aside the order of the Special Judge granting regular bail to Respondent No.2, alleged to be the mastermind of a syndicate that created shell entities and generated bogus invoices - Respondent No.2 contended that bail once granted should not be cancelled mechanically - Whether the order granting bail is perverse, illegal or unjust so as to be set aside - HELD - The law draws a clear distinction between an appeal-like challenge to an order of bail as perverse, illegal or unjust and cancellation of bail on account of supervening circumstances, and the power to cancel bail must be exercised sparingly as it results in loss of liberty already enjoyed. The Special Judge noted the gravity of the allegations, correctly observed that economic offences must be viewed seriously, and applied the established considerations including the nature of the offence, the punishment prescribed, the period of custody, the stage of investigation, the documentary and electronic nature of the evidence and the fact that custodial interrogation was not contended to be required - The decisions relied on by the Petitioner hold that economic offences are a distinct class but do not lay down that bail must be refused in every such case, and seriousness of the allegation is one factor to be balanced against the object of bail, which is to secure the presence of the accused and not to impose pre-trial punishment. The finding on completion of investigation was confined to seizure of records and collection of material and is borne out by the record, and remaining verification and tracing can proceed without custody of Respondent No.2. The plea of parity was not the foundation of the order – Further, an accused is entitled to remain silent and cannot be compelled to furnish self-incriminating material. Failure to produce records within the time sought is a matter for the Department to pursue through lawful process, and it does not by itself justify cancellation - There is no perversity, illegality or non-application of mind in the order granting bail, and the Criminal Petition is dismissed
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