Bail in GST evasion cases faces a stricter test when records show fake firms, invoices and prima facie planning.

Bail was refused in a CGST prosecution alleging fake firms, fake invoices and e-way bills, and large-scale GST evasion, because the record contained prima facie material showing planned conduct through fictitious entities. Search material, seized registers, bill books, mobile data and recorded statements were treated as sufficient at the bail stage to indicate reasonable grounds to believe the offence had been committed. The Court treated the matter as an economic offence affecting the public exchequer and applied a stricter approach to bail, declining to conduct a detailed appraisal of evidence or the defence based on retraction. The seriousness of the accusation and public interest weighed against release.

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Issues: Whether bail should be granted to the accused in a case alleging the creation and operation of fake firms, issuance of fake invoices and e-way bills, and large-scale GST evasion under the CGST regime.

Analysis: The allegations were supported by search material, seized slips, registers, bill books, mobile data and the recorded statements, which together furnished sufficient prima facie material to indicate planned conduct through multiple fictitious firms. The Court treated the alleged conduct as an economic offence involving substantial loss to the public exchequer and applied the settled principle that such offences require a stricter approach at the stage of bail. At this stage, the Court declined to undertake a detailed appraisal of evidence or the defence based on retraction, and held that the material on record showed reasonable grounds to believe that the offence had been committed. The Court also considered the nature of the accusation, the seriousness of the alleged tax evasion and the overall public interest.

Conclusion: Bail was refused as the Court found no sufficient ground to enlarge the accused on bail.

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