Bail Denied in Cross-State Fake GST ITC Racket Due to Gravity and Ongoing Probe | HC

Case Details: Bahadur Islam vs. Union of India - [2025] 181 taxmann.com 481 (Gauhati)

Judiciary and Counsel Details

• Pranjal Das, J.
• S.C. Biswas, B.D. Das & F.A. Hassan for the Petitioner.
• S C Keyal, Ld. Standing Counsel for the Respondent.

Facts of the Case

The petitioner was arrested for his alleged involvement in GST fraud using fake registrations and invoices to pass on Rs. 8.59 crore bogus input tax credit. He was arrested under Section 132 of the CGST Act. The case diary and statements indicated the petitioner’s participation, receipt of illegal remuneration, evasive disclosure on bank accounts, and assistance in fraudulent registrations.

High Court Held

The High Court held that the safeguards for arrest were held applicable to GST arrests as well. Notices of grounds and authorisation were examined. Investigation materials, if accepted at face value, showed conscious participation and illegal benefit. The network appeared organised across states, and the probe remained active. Given gravity, ongoing investigation, and punishment up to five years, bail at this stage was declined.

List of Cases Reviewed

• Radhika Agarwal v. UOI [2025] 171 taxmann.com 832/95 GSTL 225/(2025) 6 SCC 545 (para 10) followed

List of Cases Referred to

• Radhika Agarwal v. UOI [2025] 171 taxmann.com 832/95 GSTL 225 (SC) (para 10).