Gauhati HC Grants Bail to Businessman Accused of ₹3 Crore GST Credit Misuse After 15 Days in Judicial Custody [Read Order]

In a recent ruling, the Gauhati High Court granted regular bail to Ujjawal Kumar Agarwal, a businessman accused of wrongfully availing ineligible Input Tax Credit (ITC) worth about Rs. 3 crore under the Assam Goods and Services Tax Act, 2017. The court observed that further custodial interrogation was not necessary.

The petitioner, proprietor of BKS Enterprises, was arrested on 8 October 2025 in connection with a case registered under Section 132(5) of the Assam GST Act. He had been in judicial custody for 15 days when the bail application was heard.

During the hearing, the petitioner’s counsel argued that the alleged misuse of ITC amounted to Rs. 3 crore, which was below Rs. 5 crore, making the offence non-cognizable and bailable. They further argued that the authorization to arrest was vague and did not specify the material basis for concluding that the petitioner had utilized ineligible ITC of Rs. 12 crore.

The petitioner’s counsel added that the case was based entirely on documents and that custodial interrogation was unnecessary.

The State’s counsel, Mr. B. Gogoi, opposed the bail plea, arguing that the investigation was still at an early stage and that enlarging the petitioner on bail could affect the inquiry. They stated that further misuse of GST benefits was being examined.

The single-judge bench comprising Justice N. Unni Krishnan Nair observed that the petitioner had been in custody since 8 October 2025 and that the authorities had not placed sufficient materials on record to justify further detention. The court explained that since the allegations were primarily based on documents, keeping the petitioner in custody any longer was not required.

The court directed that Ujjawal Kumar Agarwal be released on regular bail upon furnishing a bond of Rs. 25,000 with two local sureties of the same amount before the Chief Judicial Magistrate, Kamrup (Metro), Guwahati. The petitioner was directed to cooperate with the investigation, avoid influencing witnesses, and not leave the jurisdiction without permission.

The court stated that violation of these conditions would be grounds for cancellation of bail. The bail application was disposed of.

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