2025 (7) TMI 1879 - HC - GST

Bail granted with Rs. 25L deposit for accused in wrongful Input Tax Credit case under GST laws

The HC allowed the regular bail application of the accused involved in wrongful availing of Input Tax Credit for three years. Considering the case facts, ... Seeking grant of Regular bail - wrongfully availing the benefit of Input Tax Credit since last three years - applicant is ready and willing to deposit the amount of Rs.25 lakhs with the GST authorities - HELD THAT:- Taking into consideration the facts of the case, nature of allegations, gravity of accusation, availability of the applicant accused at the time of Trial etc. and the role attributed to the present applicant accused, the present application deserves to be allowed and accordingly stands allowed. This Court has also gone through the FIR and police papers and also the earlier order passed by the learned Sessions Court where the learned Sessions Judge has disallowed the bail Application at initial stage. The applicant accused is ordered to be released on bail in connection with the aforesaid FIR on executing a personal bond of Rs.10,000/- with one surety of the like amount to the satisfaction of the trial Court, subject to the fulfilment of conditions imposed. Bail application allowed. ISSUES: Whether the applicant is entitled to regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in connection with alleged wrongful availing of Input Tax Credit under the GST Act.Whether the nature and gravity of the offence, including alleged wrongful availing of Input Tax Credit and the amount involved, justify denial of bail.Whether the applicant's custodial presence is necessary for the investigation.What conditions should be imposed upon granting bail in cases involving economic offences under the GST Act. RULINGS / HOLDINGS: The application for bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 is allowed as the investigation is complete and 'the presence of the applicant in the custody is no more required for the purpose of investigation.'Considering the offence alleged is punishable with imprisonment 'which may extend to 5 years,' and the applicant's willingness to deposit Rs.25 lakhs with the GST authorities, bail is granted subject to stringent conditions.The Court emphasized the three factors from Supreme Court jurisprudence-prima facie case, availability of the accused at trial, and tampering with witnesses-and found that the applicant is not likely to flee and there is no sufficient ground to deny bail.Bail is granted on executing a personal bond of Rs.10,000 with one surety of the like amount, subject to conditions including non-tampering with evidence, monthly police station attendance, surrender of passport, and deposit of Rs.25 lakhs with GST authorities within six weeks. RATIONALE: The Court applied the legal framework under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 and relevant provisions of the GST Act, specifically Sections 122 and 132, which prescribe punishment up to 5 years imprisonment for the alleged offences.The Court relied on the Supreme Court precedent in Sanjay Chandra v. C.B.I., which directs consideration of prima facie case, risk of flight, and tampering with evidence when deciding bail applications.The Court recognized that while the alleged wrongful availing of Input Tax Credit involves a substantial amount, the GST authorities retain the right to initiate appropriate recovery proceedings, and that custodial detention was no longer necessary for investigation.The Court imposed comprehensive bail conditions to mitigate risks of tampering with evidence and ensure the applicant's presence at trial, reflecting a balance between individual liberty and safeguarding the investigation and trial process.