Regular bail in alleged GST fake invoicing fraud was declined because ongoing investigation showed prima facie organised credit misuse.

Regular bail was refused in a GST prosecution alleging organised fake invoicing and fraudulent availment and passing on of input tax credit. The Court treated the material as showing a prima facie role in fictitious firms, invoices issued without actual supply of goods, circulation of fake credit, and seized electronic records supporting the investigation. It accepted that the offence was a grave economic offence affecting public interest, and held that the risks of tampering with evidence, influencing witnesses, and absconding could not be ignored at the bail stage. The application was dismissed.

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Issues: Whether regular bail should be granted in a prosecution alleging organised fake invoicing and fraudulent availment and passing on of input tax credit under the Central Goods and Services Tax Act, 2017.

Analysis: The allegations disclosed a large-scale GST fraud involving multiple fake firms, huge ineligible input tax credit, seized electronic records, and statements said to have been recorded during investigation. The investigation remained in progress and the Court treated the material as showing prima facie involvement in the creation and operation of fictitious firms, issuance of invoices without actual supply of goods, and circulation of fake credit. The Court also accepted the prosecution's case that the arrest was supported by recorded reasons and that the offence was a grave economic offence affecting public interest. In those circumstances, the Court held that the apprehension of tampering with evidence, influencing witnesses, and absconding could not be ignored at the bail stage.

Conclusion: Regular bail was declined. The application was dismissed in favour of the Revenue.

Final Conclusion: The decision proceeds on the basis that alleged large-scale GST credit fraud, coupled with continuing investigation and apprehended misuse of liberty, justified refusal of bail at that stage.

Ratio Decidendi: In cases of grave economic offences under the GST regime, where the investigation is ongoing and the material indicates organised fake invoicing, huge tax evasion, and a real risk of absconding or interference with evidence, regular bail may be refused.

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