Regular Bail Granted Based On Parity And Completion Of Investigation In Fake Input Tax Credit Case.

Regular Bail Granted Based On Parity And Completion Of Investigation In Fake Input Tax Credit Case.

Issue

Whether the petitioner (Accused No. 2) is entitled to regular bail under the BNSS in a case involving the alleged availment of fake Input Tax Credit (ITC), considering the period of incarceration and the bail status of co-accused.

Facts

• The Anti-Evasion Wing of the Medchal GST Commissionerate registered an FIR (No. GEXCOM/AE/INV/GST/2502/2024-AE) against the petitioner.

• The petitioner was accused of committing offences under Section 132 of the CGST Act, specifically for availing fake ITC through the issuance of fraudulent invoices.

• The petitioner was arrested on January 29, 2026, and remanded to judicial custody.

• The investigation into the alleged tax evasion and fraudulent billing was completed during the petitioner’s time in custody.

• Co-accused No. 3, facing similar allegations in the same FIR, had already been granted bail by the trial court.

Decision

• The Court observed that the petitioner had remained in judicial custody for a significant period since late January 2026.

• It was held that since the investigation is already complete, further custodial detention of the petitioner is no longer necessary for the purpose of the probe.

• The Court applied the principle of parity, noting that a similarly placed co-accused had already been released on bail.

• Regular bail was granted subject to the execution of a personal bond with two sureties.

• The petitioner was directed to appear periodically before the respondent authorities until the filing of the charge sheet and to strictly abide by the statutory conditions under Sections 480 and 483 of the BNSS.

Key Takeaways

• Principle of Parity: If a co-accused with a similar or more significant role has been granted bail, the court is inclined to extend the same benefit to other accused individuals, provided other conditions are met.

• Completion of Investigation: Once the investigation is finished and the evidence (usually documentary in GST cases) is secured, the necessity for continued “custodial detention” diminishes significantly.

• Incarceration Period: The length of time spent in jail prior to trial is a vital factor in determining bail, especially for economic offences where the maximum punishment is relatively moderate (five years).

• BNSS Transition: The court highlighted the application of the new procedural laws (Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023) for bail applications in current tax prosecutions.