Bail is warrantable in CGST fraud where investigation is complete and tax liability remains unadjudicated.

The applicant was arrested on 20.12.2025 in connection with Crime No. AD2212250057378B for allegedly committing offences under the Central Goods and Services Tax (CGST) Act, 2017.

The prosecution alleged that the applicant was the mastermind behind a scheme involving the creation of multiple fake firms (e.g., M/s Mahalaxmi Enterprises, M/s Prem Enterprises) to issue fake invoices amounting to ₹8,57,15,507/- and fraudulently passing on Input Tax Credit (ITC) totaling approximately ₹72 crores without actual supply of goods.

The applicant contended he was merely a partner in a newly formed entity and that no formal tax assessment had been conducted to determine actual liability.

Having been in custody since December 2025 and with the investigation substantially complete, the applicant sought regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS).

Whether the applicant is entitled to the grant of regular bail considering the nature of the economic offence and the stage of the investigation.

Sections 31(1) (Invoices), 35 (Accounts), 69 (Power to Arrest), and 132(1)(b), (c), and (f) (Punishment for certain offences) of the CGST Act, 2017.

Procedurally, the application was moved under Section 483 of the BNSS.

The court noted the principles for bail in economic offences established in State of Gujarat v. Mohanlal Jitmalji Porwal and Y.S. Jagan Mohan Reddy v. CBI, which highlight the gravity of such crimes.

It also referenced the guidelines on arrest and detention from Arnesh Kumar v. State of Bihar and Satender Kumar Antil, as well as the bailable nature of certain GST offences discussed in Vineet Jain v. Union of India.

The court balanced the gravity of the alleged economic fraud against the procedural status of the case.

It observed that while the prosecution alleged a large-scale ITC fraud, the "actual tax liability is yet to be adjudicated" and no final assessment had been completed.

The court noted that the applicant had been incarcerated since 20.12.2025 and that the investigation had "substantially progressed," with relevant documents and electronic evidence already seized, rendering further custodial interrogation unnecessary.

Furthermore, the court emphasized that the alleged offences are triable by a Magistrate and carry a maximum punishment of five years.

Consequently, the court determined that continued pretrial incarceration was not warranted, regardless of the prosecution's claim that the applicant was a habitual offender or a flight risk.

The court held that given the duration of custody and the stage of investigation, the applicant deserved to be released.

The applicant was ordered to be released on regular bail 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.