With investigation complete, a maximum punishment of five years and no likelihood of the trial concluding soon, continued detention would be punitive, the Court said.
The Allahabad High Court has granted bail to a man accused of passing on input tax credit without any inward supply, holding that pre-trial detention is not meant to be punitive in GST offences where the maximum punishment is five years and the trial is before a Magistrate [Subhash Gupta v. State of U.P. and 2 Others].
Justice Vikram D. Chauhan allowed the bail application in a case registered at Police Station Anwala, Bareilly, under Sections 336(3), 338, 340(2), 318(4) and 61(2) of the Bharatiya Nyaya Sanhita, 2023 read with Section 132(1)(b) of the CGST Act.
The applicant submitted that he was not named in the FIR, that his name surfaced only in the confessional statement of a co-accused, and that there was no other evidence linking him to the offence. He had no criminal history and had been in jail since September 11, 2026. The charge sheet had been filed.
Counsel for the GST Department opposed the plea but could not dispute these submissions.
The Court stressed the presumption of innocence and held that an accused cannot be kept in custody indefinitely if the trial is not likely to conclude within a reasonable time. It relied on Sanjay Chandra v. CBI, which holds that the object of bail is neither punitive nor preventative.
Referring to the Supreme Court's recent GST bail orders in Atul Mehra v. Union of India and Vineet Jain v. Union of India, and to Ratnambar Kaushik v. Union of India, the Court noted that in such cases the evidence is largely documentary and the trial is before a Magistrate.
It quoted the Supreme Court's observation in Vineet Jain that "these are the cases where in normal course, before the Trial Courts, the accused should get bail unless there are some extra ordinary circumstances."
The Court also invoked Manish Sisodia v. Enforcement Directorate on the principle that bail is the rule and jail the exception.
It recorded that the investigation was complete, a complaint had been filed before the Special Chief Judicial Magistrate (Economic Offence), Meerut, no charge had been shown to be framed, and the trial was unlikely to conclude within a year. No material was shown that the applicant would tamper with evidence or flee.
The applicant was released on a personal bond with two sureties, subject to conditions including appearance before the trial court and not leaving India without the court's permission.
The order is notable because bail was granted after about six weeks of custody, reinforcing the line of Supreme Court rulings that GST prosecutions based on documentary evidence do not ordinarily warrant prolonged pre-trial detention.
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