The Gujarat High Court granted regular bail to a person accused of availing ₹43 to 44 crore of fake input tax credit, noting the five-year maximum sentence, filed charge-sheet and completed seizure of records.

Once the statutory period is over, the fact that further investigation is continuing and more witness statements are to be recorded is not a ground to refuse bail to an accused charged under Section 132 of the CGST Act [Jaydeep Jayantilal Hudaka v. State of Gujarat & Anr., 2026-juristway.com-3197-HC(Gujarat)-GST].

Justice Hasmukh D. Suthar decided the application for regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023. It arose from a DGGI Surat Zonal Unit case under Section 132 of the CGST Act and the Gujarat GST Act, read with Section 20 of the IGST Act. The applicant had been in custody since 1 Aug 2026.

The applicant’s counsel argued that he was merely an accountant and had been falsely implicated. The charge-sheet had been filed, nothing remained to be recovered, the maximum sentence was five years, and the offence was triable by a Judicial Magistrate First Class. All books, material and electronic devices had already been seized.

The department opposed bail. It alleged that the applicant was not an accountant, had forged documents to obtain registrations of M/s Ganesh Trading and M/s Prime Petrochem, and had fraudulently availed input tax credit (ITC) of ₹43 to 44 crore without actual transactions. The persons in whose names the firms were registered had disowned their signatures. Investigation was continuing, the amount could rise, and electronic data was vulnerable to tampering.

The Court held that investigation “cannot go on endlessly” and that concerns about tampering could be met through suitable conditions. It relied on Vineet Jain v. Union of India (2023 SCC OnLine (SC) 2331) for the principle that, in economic offences carrying limited sentences, bail should normally be granted unless extraordinary circumstances exist.

It also relied on Sanjay Chandra v. Central Bureau of Investigation ([2012] 1 SCC 40) and Gudikanti Narasimhulu & Ors. v. Public Prosecutor, High Court of Andhra Pradesh ((1978) 1 SCC 240). Keeping the accused in jail while a trial that would take time was pending amounted to pre-trial conviction, the Court said, invoking the principle that bail is the rule and jail the exception, and Article 21 of the Constitution.

Bail was granted on a personal bond of ₹25,000 with one surety. The applicant must surrender his passport within a week, not leave Gujarat without the trial court’s permission, and mark his presence at the police station twice a month for three months. He must also cooperate with the further investigation and not contact witnesses.

2026-juristway.com-3197-HC(Gujarat)-GST