GST fraud and witness intimidation justified bail cancellation where bogus invoicing was treated as cognizable and non-bailable conduct.

Alleged floating of bogus firms and issuance of invoices without actual supply of goods was treated as conduct falling within Section 132(1)(b) of the CGST Act and, on the material considered, as attracting the cognizable and non-bailable regime under Section 132(5). Bail was also held liable to cancellation because cancellation requires cogent circumstances such as interference with justice, abuse of liberty, or tampering with evidence, and the record indicated both serious alleged GST fraud and witness intimidation. The earlier bail order was set aside and the respondent was taken into custody.

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Issues: (i) Whether the alleged conduct fell within Section 132(1)(b) of the Central Goods and Services Tax Act, 2017 and, on the material before the Court, attracted the more serious regime under Section 132(5); (ii) Whether the bail already granted to the respondent was liable to be cancelled on account of the material showing gravity of the offence and intimidation of witnesses.

Issue (i): Whether the alleged conduct fell within Section 132(1)(b) of the Central Goods and Services Tax Act, 2017 and, on the material before the Court, attracted the more serious regime under Section 132(5).

Analysis: The allegations were that bogus firms were floated and invoices were issued without actual supply of goods so as to wrongfully avail input tax credit. That conduct was held to squarely answer clause (b) of sub-section (1) of Section 132. On the record then available, the total alleged tax evasion was treated as exceeding the threshold for the cognizable and non-bailable category, and the view that the case was below the threshold was rejected.

Conclusion: The alleged offence was held to fall under Section 132(1)(b), and on the material considered it was treated as attracting the cognizable and non-bailable regime.

Issue (ii): Whether the bail already granted to the respondent was liable to be cancelled on account of the material showing gravity of the offence and intimidation of witnesses.

Analysis: Cancellation of bail requires cogent and overwhelming circumstances, including interference with the due course of justice, abuse of liberty, or likelihood of tampering with evidence. The Court found that the grant of bail had overlooked the serious nature of the alleged fraud and also took note of material indicating that witnesses were being threatened, which was sufficient to show that continued liberty was not conducive to a fair investigation and trial.

Conclusion: Bail was held liable to be cancelled and the earlier bail order was set aside.

Final Conclusion: The respondent was taken into custody, and the Court treated the case as one warranting cancellation of bail because of the seriousness of the alleged GST fraud and the risk of witness intimidation.

Ratio Decidendi: Bail can be cancelled where the original grant is inconsistent with the material showing a cognizable and non-bailable GST offence and where subsequent conduct indicates tampering with evidence or intimidation of witnesses.

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