Defective Arrest Memo: Allahabad HC Grants Bail in 32 Cr Fake GST Invoice Case [Read Order]

The Allahabad High Court granted bail to an accused involved in a Rs. 32.66 crore GST fraud case, observing that the prosecution did not seek custodial remand and the evidence against the applicant was primarily documentary. The Court held that since the applicant had no criminal antecedents and the offence carried a maximum sentence of five years, it was a fit case for bail.

Vikas Singh, the applicant, was accused of fraudulently generating fake Input Tax Credit (ITC) and issuing bogus invoices on the GST portal without any underlying supply of goods. It was alleged that he utilised these fake credits to set off the output tax liability for M/s RVNL Contracts, thereby causing a wrongful loss of Rs. 32.66 crore to the public exchequer.

The counsel for the applicant submitted that he was taken away by DGGI officers on 16.02.2026, but was shown as arrested on 18.02.2026. It was argued that the department only sought judicial custody, indicating that their interrogation was complete. The defence further contended that the arrest memo was defective and violated Article 22(1) of the Constitution, as the grounds of arrest were not properly mentioned in the copy supplied to the accused.

The applicant also argued that the arrest memo reflected non-application of mind by vaguely citing multiple clauses of Section 132 of the CGST Act. Additionally, it was submitted that parallel proceedings by the State GST authorities were already underway against the firms allegedly controlled by the applicant, making the CGST proceedings unwarranted.

Per contra, the respondent’s counsel vehemently opposed the bail application. He submitted that the arrest memo was a standard printed proforma available on the Department's portal and that the "grounds of arrest" and "reasons to believe" were duly served on the applicant along with the memo. He argued that the offences were cognizable and non-bailable, and that the arrest procedure had been followed correctly.

Justice Karunesh Singh Pawar perused the record and relied on the Supreme Court's decision in Vineet Jain vs. Union of India, which observed that bail should ordinarily be granted in such cases unless there are exceptional circumstances. The Court noted that the applicant had been in jail since 18.02.2026, no custodial remand had been taken, and the presence of the accused could be secured during trial.

Accordingly, the bail application was allowed. The applicant was ordered to be released on bail upon furnishing a personal bond and two sureties of like amount. The Court imposed conditions, including that the applicant shall not tamper with evidence, not leave the territorial limits of Lucknow without permission, and deposit his passport with the trial court.

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