Completion of investigation and bail granted to co-accused entitle the petitioner to regular bail under parity.

Completion of investigation and bail granted to co-accused entitle the petitioner to regular bail under parity.

Issue

• Whether the Petitioner (Accused No. 2), arrested for allegedly availing fake Input Tax Credit (ITC) via fraudulent invoices under the CGST/TGST Act, is entitled to regular bail under Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) considering their period of custody, completion of the investigation, and the grant of bail to a co-accused.

Facts

• The Petitioner was arrayed as Accused No. 2 in an FIR registered by the Anti-Evasion Wing of the Medchal GST Commissionerate for offenses under Section 132 of the CGST Act involving the fraudulent availment of ITC through fake billing.

• Following their arrest, the Petitioner was remanded to judicial custody and had been incarcerated since 29 January 2026.

• During the period of the Petitioner’s detention, the investigation was successfully completed by the respondent authorities.

• Additionally, the Trial Court had already enlarged Co-accused No. 3 on regular bail. Citing these developments and the duration of custody, the Petitioner approached the High Court for regular bail.

Decision

• No Further Detention Required: The High Court observed that because the investigation was already completed by the Anti-Evasion wing, the department no longer required the continuous custodial detention of the Petitioner for interrogation or recovery.

• Principle of Parity and Custody Period: The Court held that the period of incarceration already undergone by the Petitioner since January 2026, combined with the fact that a similarly situated co-accused (Accused No. 3) had already been granted bail, weighed heavily in favor of releasing the Petitioner.

• Regular Bail Granted: The criminal petition was allowed, and the Petitioner was directed to be released on regular bail.

• Conditions of Release: The bail was made subject to strict conditions, including the execution of a personal bond with two sureties, a mandate to appear periodically before the GST authorities until the formal filing of the charge sheet, and a directive to strictly adhere to all standard statutory conditions under the BNSS. The ruling stands in favour of the assessee.

Key Takeaways

• Application of Parity in Tax Offenses: In white-collar and GST fraud prosecutions, if the primary or similarly placed co-accused is granted bail by a competent court, the benefit of parity generally extends to other co-accused individuals, provided their level of involvement is comparable.

• Investigation Completion Diminishes Detention Need: Once the investigation is complete and evidentiary records are secured by the GST Commissionerate, the judicial ground for denying bail reduces substantially, as continuous pretrial detention cannot be used as a form of punitive measure.

• Conditional Liberty: While courts are inclined to grant bail after the investigation settles, they protect the revenue’s interests by anchoring the bail with strict regulatory conditions, such as mandatory periodic check-ins with the investigators until the charge sheet is filed.