Bail granted in CGST offences where investigation is complete and evidence is primarily documentary.

The applicant, Santosh Wadhwani, was arrested on January 29, 2026, in connection with Crime No. 158/GST/2025-2026 for allegedly violating the Central Goods and Services Tax (CGST) Act, 2017

The prosecution alleged that the applicant, through his firm M/s. Vijay Laxmi Trade Company, fraudulently availed Input Tax Credit (ITC) worth ₹11.44 Crores by showing transactions with four non-existent firms without any actual supply of goods

The applicant contended that he had complied with summons, provided documentary evidence including e-way bills and bank statements, and that the tax liability had not yet been formally determined through assessment

the respondent argued that the applicant orchestrated a paper-based fraud, was non-cooperative, and was involved in a separate ₹61 Crore bank fraud case

After the Chief Judicial Magistrate rejected his bail application on February 4, 2026, the applicant moved the High Court for regular bail

1. Whether the applicant is entitled to regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) considering the nature of the economic offence and the status of the investigation.

The court primarily applied Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) regarding the grant of regular bail

Substantively, the case involved Section 132(1)(c) of the CGST Act, 2017, which criminalizes the fraudulent availment of ITC, and Section 132(5), which renders such offences cognizable and non-bailable if the amount exceeds ₹5 Crores

The court also considered Section 138 of the CGST Act, which stipulates that such offences are compoundable, and noted the maximum statutory punishment of five years for the alleged contravention

The court reasoned that although the allegations involve a significant economic offence, the case is primarily built upon documentary evidence that is already in the possession of the prosecution

Since the complaint has been filed and the investigation concerning the applicant is substantially complete, the court found that custodial interrogation was no longer necessary

The court balanced the gravity of the charges against the procedural facts that the maximum sentence is five years and the offence is compoundable

Furthermore, the court noted that the applicant had been in judicial custody since January 29, 2026, and the prosecution failed to demonstrate a specific risk of the applicant tampering with evidence or influencing witnesses, particularly given the documentary nature of the proof

The court ordered the release of Santosh Wadhwani upon furnishing a personal bond of ₹1,00,000/- with one solvent surety to the satisfaction of the trial court

The order remains in force until the disposal of the case