Prima facie GST fraud allegations justified bail refusal, and incomplete assessment did not bar prosecution.

Bail was refused in a GST prosecution where the material, including witness statements and documents, indicated prima facie involvement in alleged fraudulent invoicing and wrongful input tax credit. The Court treated the matter as a serious economic offence and noted that the investigation was at an early stage. It further held that non-completion of assessment proceedings did not create an absolute bar to arrest or prosecution, and the absence of proceedings under sections 73 and 74 did not by itself defeat consideration of the offence for bail purposes.

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Issues: (i) Whether the applicant was entitled to bail in a prosecution under section 132(1)(i) of the Central Goods and Services Tax Act, 2017. (ii) Whether absence of assessment under sections 73 and 74 of the Central Goods and Services Tax Act, 2017 barred arrest or prosecution at the stage of bail.

Issue (i): Whether the applicant was entitled to bail in a prosecution under section 132(1)(i) of the Central Goods and Services Tax Act, 2017.

Analysis: The allegation was of fraudulent availment and issuance of fake invoices resulting in wrongful input tax credit of substantial value. The material placed by the prosecution, including witness statements and documentary circumstances, was treated as sufficient to show prima facie involvement. The alleged conduct was viewed as an economic offence of a serious nature, and the investigation was stated to be at an early stage.

Conclusion: Bail was not warranted and the request was rejected.

Issue (ii): Whether absence of assessment under sections 73 and 74 of the Central Goods and Services Tax Act, 2017 barred arrest or prosecution at the stage of bail.

Analysis: The contention that no offence could be made out until completion of assessment was not accepted. The reliance placed on earlier decisions was distinguished on the footing that they did not lay down an absolute bar on arrest, but only required circumspection in exercise of the power. On the facts, the Court held that non-completion of proceedings under sections 73 and 74 did not by itself defeat the prosecution case for bail purposes.

Conclusion: The absence of assessment under sections 73 and 74 did not bar consideration of the offence under section 132.

Final Conclusion: The application for bail failed because the Court found a prima facie economic offence and declined to release the applicant at the initial stage.

Ratio Decidendi: In bail proceedings arising from serious GST-related economic offences, the Court may refuse bail on a prima facie assessment of the material, and the absence of completed assessment under sections 73 and 74 does not create an absolute bar to prosecution or arrest under section 132.

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