In a significant ruling concerning GST-related offences, the Allahabad High Court granted bail to an individual accused of orchestrating input tax credit (ITC) fraud through fake firms. The decision underscores the principle of proportionality in pre-trial detention and the relevance of completed investigation in bail considerations.
đź“Ś Case Background:
The applicants were charged under GST law for allegedly creating and operating multiple fake firms to fraudulently avail and pass on input tax credit. They had already spent seven months in judicial custody. The prosecution opposed bail on the grounds of the gravity of the offence and the potential impact on the integrity of the GST system.
⚖️ Court’s Observations:
- The maximum punishment for the alleged offences was five years, while the accused had already undergone seven months of incarceration.
- The investigation had been completed, and no further custodial interrogation was necessary.
- The trial was yet to commence, indicating a likely prolonged period before final adjudication.
- All witnesses were government officials, reducing the risk of the accused influencing or tampering with evidence.
âś… Verdict:
The Court held that continued custody would be unjustified and excessive in light of the completed probe and unlikelihood of evidence tampering. Accordingly, bail was granted, subject to conditions as deemed fit by the trial court.
đź“š Key Takeaway for Practitioners:
This ruling reaffirms that in economic offences, especially under GST, bail may be considered favourably where:
- The investigation is complete,
- The accused has spent significant time in custody,
- The trial is delayed,
-
And there is no likelihood of the accused influencing official witnesses.
Citation:
Mohd. Adil v. State of U.P.
[2025] 176 taxmann.com 524 (Allahabad) | Date: 09 July 2025