GST Evasion allegation of ₹20 Crore: Allahabad HC Grants Bail to Accused based on SC Rulings [Read Order]

The Allahabad High Court has granted bail an accused in a case involving alleged GST ( Goods and Services Tax ) evasion of over ₹20 crore through fraudulent input tax credit (ITC) claims, observing that the offences were documentary in nature and punishable with a maximum imprisonment of five years.

The applicant had been booked under Sections 132(1)(b), 132(1)(c), and 132(1)(i) of the Central Goods and Services Tax Act, 2017 for allegedly evading tax exceeding ₹20 crore through ITC misuse.

It was argued that the allegations were false and that the investigation was already concluded, as the GST Department had filed its complaint. The applicant had been in judicial custody since June 13, 2025 over four months without any prior criminal record.

The prosecution opposed the bail, contending that the accused had played fraud and caused a substantial loss to the exchequer. However, the Department did not dispute that the maximum punishment prescribed under the alleged offences was five years and that the trial would be before a Magistrate.

Justice Sameer Jain, while granting bail, referred to the Supreme Court’s recent ruling in Vineet Jain v. Union of India, where the Apex Court had criticized the denial of bail in similar GST cases, holding that such offences, being documentary in nature and carrying limited sentences, should ordinarily warrant bail once investigation is complete.

The Court also quoted Ratnambar Kaushik v. Union of India, where the Supreme Court granted bail in a GST evasion case, observing that since the case relied on electronic and documentary evidence, there was minimal risk of tampering.

Justice Jain observed that “the entire case of GST is based on documentary evidence, therefore, considerable period of time will be consumed in deciding the trial,” and that continued detention served no purpose. Considering the Supreme Court’s ruling and the applicant’s clean record, the Court found it proper to release him on bail.

Accordingly, the Court directed applicant’s release on furnishing personal bond and two sureties, subject to conditions that he must appear before the trial court on scheduled dates, refrain from influencing witnesses, and avoid any criminal activity.

The Court clarified that its observations were confined to the bail stage and would not affect the trial’s merits.

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