Bogus invoicing and wrongful input tax credit may support penal prosecution alongside GST action; bail was refused.

Allegations of bogus invoicing and wrongful input tax credit under the GST regime did not bar invocation of the general penal law, because the earlier Division Bench ruling was held to permit FIR registration and prosecution on the same conduct, and the cited Supreme Court decision was found not to displace that position in light of the U.P. GST Act. The investigation material also prima facie indicated involvement in creating fictitious firms and facilitating large-scale tax evasion. Bail was therefore refused.

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Issues: Whether the allegation of bogus invoicing and wrongful input tax credit, though falling within the GST regime, barred invocation of the general penal law and justified grant of bail.

Analysis: The Court held that the earlier Division Bench decision governing the field permitted registration of FIR and prosecution under the penal law in respect of the same conduct, and that the ratio of the cited Supreme Court decision did not displace that position in view of the express scheme of the U.P. GST Act. The Court further found that the material collected in investigation prima facie showed the applicants' involvement in creating fictitious firms and causing large-scale tax evasion, and therefore the plea for bail was not made out.

Conclusion: The applicants were not entitled to bail and the request for release on bail was rejected.

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