Input tax credit fraud case alleging false ITC claim; bail granted after documentary evidence seized due to prolonged trial

Alleged fraudulent claiming and passing on of input tax credit forms the central subject, with the analysis hinging on documentary evidence already seized from the accused; reliance on such documentary proof and absence of prior similar involvement support entitlement to bail, and the consequence is release on furnishing bail and surety bonds. The alleged false input tax credit amounts to Rs. 7.46 crores but offences attracting maximum five-year punishment and the statutory bailable threshold for evasion up to Rs. 5 crore inform the bail assessment, and prolonged pendency of magisterial trial and custody duration weigh in favour of bail being granted.

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Issues: Whether the petitioner, accused of availing and passing on fraudulent input tax credit under provisions of the CGST/IGST Acts and arrested in connection therewith, is entitled to regular bail during the pendency of trial.

Analysis: The matter concerns alleged availment and distribution of fraudulent input tax credit and offences triable by a Magistrate under specified provisions of the CGST/IGST legislation. The prosecution case is documentary in character and the relevant records have been taken into possession. The maximum sentence prescribed is limited to five years and the petitioner has been in custody for a period substantially long relative to the expected duration of trial. Precedent authority indicates that in cases triable by a Magistrate, based primarily on documentary evidence and lacking antecedents or extraordinary circumstances, bail is ordinarily permissible until conclusion of trial. Consideration was given to the risk of the accused influencing co-accused or evidence, balanced against the nature of evidence already seized and absence of prior involvement.

Conclusion: The petition for regular bail is allowed and the petitioner is to be released on furnishing bail bond and surety bond to the satisfaction of the trial court/duty magistrate on usual terms and conditions, without any comment on merits of the case.

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