Economic Offences Under CGST Do Not Automatically Justify Prolonged Custody:Allahabad HC Grants Bail to Chinese National [Read Order]

Upholding the position that economic offenses under the Goods andServices Tax Act do not require automatic or prolonged imprisonment the High Court of Allahabad has allowed bail to a Chinese national in a GST evasion case while reiterating the principles of personal liberty and bail.

The bail application was filed by Alice Lee Li Tengli under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The applicant was arrested on 26 August 2025 in relation to Case No. 40 of 2025, which was registered by the CGST Commissionerate for offenses under Sections 132(1)(d), (e), (f), (i), and (l) of the CGST Act, 2017.

The prosecution stated that M/s Tentech LED Display Pvt. Ltd. secretly relocated their manufacturing operations to an unregistered place of business and also classified LED display items to pay GST at 18% instead of 28% leading to an alleged GST evasion of ₹88.80 lakh from FY 2019-20 to 2024-25. The accused included the applicant and other persons as well as the company.

The applicant alleged that she was wrongly implicated and that she was appointed only on 21 February 2024 as a security staff member on a fixed salary of ₹15,000 with no involvement in business activities or taxation. It was also submitted that the offenses are cognizable by a Magistrate with a maximum sentence of five years and that the prosecution's case is based solely on documentary evidence. Similar treatment was also sought on the ground that another co-accused had already been released on bail.

Whereas, The Union of India and the CGST department opposed the grant of bail on the ground that economic offenses fall in a separate category and that the applicant had earlier been involved in another criminal case. Concerns were also raised regarding her foreign nationality and expired visa.

The Court held that there was no justification for continued detention especially where the evidence was documented, the penalty was restricted to five years and the trial would take time. The Court further held that economic offenses under the CGST Act do not per se preclude the grant of bail and that there was no satisfactory material to indicate the possibility of tampering with evidence.

Accordingly, the bail was granted with very strict conditions including restrictions on traveling outside India, compulsory presence in court embassy attestation and regular disclosure of the applicant’s location.

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