Accused granted bail in GST evasion case under Section 132 after two months custody

The Rajasthan HC allowed bail to an accused charged with GST evasion and bogus supply under Section 132(1)(c) read with Section 132(1)(i) & 132(5) of the Rajasthan GST Act, 2017. The court considered the accused had been in judicial custody since April 2025 for two and half months, charge-sheet was filed in May 2025, and trial would take considerable time. Given the documentary nature of evidence with no risk of tampering through official witnesses, and citing SC precedents, bail was granted on furnishing personal bond of Rs. 5,00,000 with two sureties.

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1. ISSUES PRESENTED and CONSIDERED

- Whether the petitioner, accused under Sections 132(1)(c), 132(1)(i) and 132(5) of the Rajasthan Goods and Service Tax Act, 2017, is entitled to bail under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023, given the nature of the offence and the facts of the case.

- Whether the petitioner's custodial detention is justified in light of the evidence, the quantum of alleged tax evasion, and the likelihood of tampering with evidence or influencing witnesses.

- The applicability and interpretation of precedents set by the Hon'ble Supreme Court in bail matters involving offences under the Goods and Services Tax laws, particularly in cases involving documentary evidence and no criminal antecedents.

- The conditions and safeguards necessary to be imposed if bail is granted to ensure the integrity of the trial and prevent misuse of liberty.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Bail under Section 483 BNSS-2023 for Offences under GST Act

The legal framework involves Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023, which governs bail applications, read with the provisions of the Rajasthan Goods and Service Tax Act, 2017, specifically Sections 132(1)(c), 132(1)(i), and 132(5) which prescribe punishment for tax evasion and related offences.

The Court considered the maximum punishment under the relevant GST provisions, which is imprisonment up to five years with fine. The petitioner has been in judicial custody since 03.04.2025, and the charge-sheet was filed on 30.05.2025. The Court noted that the petitioner has no criminal antecedents.

Precedents relied upon include the Supreme Court's decision in Vineet Jain, where bail was granted in a GST-related offence with similar maximum punishment and documentary evidence basis. The Court emphasized that ordinarily, accused in such cases should be granted bail unless extraordinary circumstances exist. The Vineet Jain judgment states:

"The offences alleged... The sentence is limited and in any case, the prosecution is based on documentary evidence. There are no antecedents... These are the cases where in normal course, before the Trial Courts, the accused should get bail unless there are some extraordinary circumstances."

Other precedents cited include Vishal Agarwal and Ashutosh Garg, which reinforce the principle of granting bail in GST offence cases where the evidence is documentary and there is no risk of tampering or fleeing.

The Court's reasoning was that since the charge-sheet is filed and the trial is expected to be protracted, continued custody would not serve a productive purpose. The petitioner's incarceration of over two months was also considered significant.

Issue 2: Risk of Tampering with Evidence or Influencing Witnesses

The prosecution argued that the petitioner was involved in making bogus supplies leading to tax evasion amounting to Rs. 9.54 Crores, and therefore bail should be denied to prevent interference with the investigation or trial.

The Court noted that all witnesses are official witnesses, and the evidence to be adduced is primarily documentary and electronic. This reduces the risk of tampering or influencing witnesses. The Court explicitly found no apprehension of tampering or intimidation, which is a critical consideration in bail applications.

The Court also imposed stringent conditions to prevent any interference with the trial process, including prohibitions against tampering with evidence, influencing witnesses, or making inducements or threats to persons acquainted with the facts of the case.

Issue 3: Conditions to be Imposed on Bail

In granting bail, the Court imposed conditions to ensure the petitioner's presence during trial and to safeguard the integrity of the judicial process. These include:

• Furnishing a personal bond of Rs. 5,00,000 along with two sureties of the like amount.
• Not leaving the country without prior permission of the Court.
• Cooperating with the trial and attending all hearings unless exempted.
• Prohibitions on tampering with evidence or influencing witnesses.
• Prohibition on any inducement, threat, or promise to dissuade persons from disclosing facts.

The Court made clear that failure to comply with these conditions would entitle the prosecution to move for cancellation of bail.

3. SIGNIFICANT HOLDINGS

The Court held that:

"In a case of the present nature, the evidence to be tendered by the respondent would essentially be documentary and electronic. The ocular evidence will be through official witnesses, due to which there can be no apprehension of tampering, intimidating or influencing."

It established the core principle that in GST offence cases where the maximum punishment is limited (up to five years), and the prosecution case is documentary, bail should ordinarily be granted unless extraordinary circumstances exist.

The Court concluded that the petitioner, having undergone over two months of custody and facing a trial expected to be lengthy, is entitled to bail subject to strict conditions safeguarding the trial process. This aligns with the Supreme Court's precedent in Vineet Jain and related cases.

The final determination was to allow the bail application under Section 483 BNSS-2023, with specified bond and conditions, balancing the petitioner's liberty and the prosecution's interest in a fair trial.

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