Regular bail in GST prosecution granted where alleged exemption dispute remained pending and the accused had cooperated with investigation.

Regular bail was granted in a CGST prosecution where alleged wrongful availment of an exemption and GST evasion were still pending adjudication. The Court treated disputed questions about whether the trademark benefit had been foregone and whether the Department had been misled as matters for trial, not as grounds to continue custody at the bail stage. The applicant's prior intimation to the Department, filing of returns, audit compliance, and part-payment during investigation supported the exercise of discretion in favour of bail.

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Issues: Whether regular bail should be granted in a prosecution under the Central Goods and Services Tax Act, 2017 pending adjudication of the alleged wrongful availment of exemption and alleged GST evasion.

Analysis: The application was considered in the context of a fiscal controversy where the applicant had availed a notification benefit after intimating the Department, returns had been filed and audited, and a substantial amount had already been deposited during investigation. The question whether the registered trademark had been foregone and whether the authority had been misled was treated as a matter for adjudication rather than a ground to deny bail at this stage.

Conclusion: Regular bail was granted.

Ratio Decidendi: In a fiscal prosecution, where the dispute is still to be adjudicated and the accused has cooperated and made part payment, custody need not be continued if discretion can be exercised in favour of bail.

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