Accused granted regular bail in fraudulent Input Tax Credit case without actual goods movement

The Chhattisgarh HC granted regular bail to an accused charged with fraudulent availment of Input Tax Credit without actual movement of goods. The court considered that a complaint had been filed, investigation was ongoing, and the applicant had been in custody since 28.03.2025. Given that trial conclusion would take considerable time, the court determined the applicant was entitled to bail. The accused was ordered released on personal bond with two local sureties to the satisfaction of the concerned court, subject to specified conditions. The bail application was allowed.

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ISSUES:

Whether the applicant is entitled to regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in offences under the CGST Act, 2017 involving alleged fraudulent availment of Input Tax Credit (ITC).Whether the allegations of fraudulent ITC claim based on non-genuine or fake transactions constitute a serious economic offence justifying denial of bail.Whether the applicant's arrest and detention comply with procedural safeguards, including the requirement of written reasons as per CBIC guidelines.Whether the nature of the offence, evidence on record, and conduct of the applicant support grant of bail pending trial.What conditions should be imposed upon grant of bail in economic offence cases under the CGST Act.

RULINGS / HOLDINGS:

The applicant is entitled to regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, given that the offence is "non-heinous," triable by a Magistrate, and compoundable, and considering the "prolonged detention is unjustified" as investigation is complete and trial is pending.The Court held that the allegations of fraudulent availment of ITC based on documentary evidence and statutory interpretation do not establish criminal intent sufficient to deny bail; the applicant has been "falsely implicated" and has cooperated fully with the investigation.The arrest violated CBIC guidelines due to the "absence of written reasons," rendering the detention procedurally defective.The Court found no evidence suggesting risk of absconding, tampering with evidence, or non-cooperation, noting the applicant's strong community ties, absence of prior criminal history, and family responsibilities.Conditions imposed include undertaking not to seek adjournments when witnesses are present, mandatory presence at trial dates, and consequences for misuse of bail liberty, including proceedings under Sections 269, 209, and 351 of the Bharatiya Nyaya Sanhita.

RATIONALE:

The Court applied the legal framework under the CGST Act, 2017, and the Bharatiya Nagarik Suraksha Sanhita, 2023, particularly Section 483 relating to bail.The Court relied on the principle that economic offences, while serious, do not ipso facto preclude bail, especially when the offence is "non-heinous," and the investigation is complete.Reference was made to the CBIC guidelines on arrest procedures, emphasizing the requirement of written reasons to prevent arbitrary detention.The Court noted precedent in Ashutosh Garg v. Union of India (2024), where bail was granted in a similar matter involving ITC fraud allegations, indicating a doctrinal approach favoring bail where investigation is complete and evidence is documentary.The Court balanced the gravity of the offence against the applicant's rights and the interest of justice, imposing strict bail conditions to safeguard the trial process and prevent abuse of liberty.

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