Bail in GST fake firm allegations may be granted after investigation ends and custodial detention is no longer necessary.

Bail was justified where the investigation was complete, the accused had remained in custody since 14.11.2024, and the alleged role in creating fake firms and passing fraudulent input tax credit was still to be tested by evidence. The Court applied settled bail principles that pre-conviction detention should not operate as punishment and that bail in economic offences is not to be refused mechanically merely because the allegations are serious. As the alleged offence carried a maximum sentence of five years and further custodial detention was not shown to be necessary, release on bail was ordered.

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Issues: Whether bail should be granted to the applicant accused of offences under Section 132(1)(b) and (c) of the Central Goods and Services Tax Act, 2017 in connection with alleged creation of fake firms and fraudulent passing of input tax credit.

Analysis: The applicant was in custody since 14.11.2024, investigation had already concluded, and the alleged role in creation of fake firms remained a matter for evidence. The maximum sentence for the alleged offence was five years. The Court considered the settled bail principles that liberty cannot be curtailed as punishment before conviction and that even in economic offences bail is not to be denied mechanically merely because the allegation is serious. In the facts of the case, further custodial detention was not shown to be necessary.

Conclusion: Bail was held to be justified and the applicant was entitled to release on bail.

Ratio Decidendi: Where investigation is complete, the accused is facing a comparatively limited maximum sentence, and the disputed role is yet to be tested by evidence, bail should ordinarily be granted even in an economic offence, subject to securing the accused's at trial.

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