The Supreme Court in Amit Mehra v. Union of India held that prolonged pre-trial custody and anticipated delay in trial can justify grant of bail even in serious cases involving fake input tax credit (ITC) fraud. The petitioner had remained in judicial custody for over eight months, while the trial had not commenced and charges were yet to be framed. The Court noted that even if the trial began, it was unlikely to conclude within a reasonable time, and the offences were triable by a Magistrate with a maximum punishment of five years. While acknowledging the gravity of the allegations, the Court emphasized the importance of personal liberty and the need to avoid indefinite incarceration of under-trial prisoners. Balancing these factors, it exercised discretion to grant bail and set aside the High Court’s order denying relief, while permitting the trial court to impose appropriate conditions to safeguard the interests of the prosecution.
Facts:
Amit Mehra (“the Petitioner”) was accused in Case No. 442 of 2025 alleging offences punishable under Section 132(1)(b) of the CGST Act, 2017, Section 132(1)(i) of the GST Act, 2017, and Section 20(xv) of the IGST Act, 2017, in relation to a large fake-ITC fraud.
Union of India (“the Respondent”), acting through the Directorate General of GST Intelligence, opposed the Petitioner’s release on bail and relied upon the allegation that the Petitioner was the alleged mastermind behind the creation of multiple bogus firms and facilitation of fraudulent ITC.
The Petitioner contended that he had been in judicial custody for more than eight months as an under-trial prisoner, that the trial had not yet commenced, that charges were yet to be framed, and that even if the trial commenced, it would not conclude within a reasonable time. The Respondent contended that the gravity of the offence and the Petitioner’s alleged central role in the fake-ITC arrangement justified denial of bail.
Aggrieved by the order dated November 07, 2025 passed by the Punjab & Haryana High Court in CRMM No. 43074/2025, which denied regular bail, the Petitioner approached the Supreme Court by way of Petition for Special Leave to Appeal (Crl.) No. 20996 of 2025.
Issue:
Whether the Petitioner was entitled to grant of regular bail despite serious allegations of fake-ITC fraud, considering prolonged pre-trial custody and delay in commencement and conclusion of trial?
Held:
The Hon’ble Supreme Court of India in Special Leave to Appeal (Crl.) No. 20996/2025 held as under:
- Observed that, they do not undermine the gravity of the alleged offence, but also that the Petitioner is in judicial custody as an under-trial prisoner past 8 months. The Trial Court is yet to commence. Charge is yet to be framed.
- Noted that, Even if the trial commences in near future, it would not conclude within next one year. The maximum punishment that the trial court may be in a position to impose upon the petitioner if held guilty would be upto 5 years. In such circumstances, referred to above, we are persuaded to exercise our discretion in favour of the petitioner.
- Directed that, The petitioner is ordered to be released on bail, subject to terms and conditions that the Trial Court may deem fit to impose. Further directed that, if the department seeks any specific condition to safeguard its interest, it may make a request before the Trial Court, which shall consider the same in accordance with law.
Our Comments:
The Supreme Court exercised discretionary jurisdiction in bail matters by expressly balancing gravity of offence against constitutional considerations of personal liberty, prolonged incarceration of an under-trial, and systemic delay in criminal proceedings. The Court placed decisive reliance on objective factors recorded on the face of the record, namely: (i) duration of custody exceeding eight months, (ii) non-commencement of trial, (iii) absence of charge-framing, (iv) magistrate-triable nature of offences, and (v) statutory maximum punishment of five years.
Relevant Provisions:
Section 132(1)(b) of the Central Goods and Services Tax Act, 2017
“Whoever commits or causes to commit and retain the benefits arising out of, any of the following offences, namely:—
(b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder, leading to wrongful availment or utilisation of input tax credit or refund of tax;”
Section 132(1)(i) of the Central Goods and Services Tax Act, 2017
“Whoever commits or causes to commit and retain the benefits arising out of, any of the following offences, namely:—
(i) abets or induces in any manner another person to commit any of the offences specified in clauses (a) to (h) of this sub-section;”
Section 20(xv) of the Integrated Goods and Services Tax Act, 2017
“The provisions of the Central Goods and Services Tax Act, 2017 relating to offences and penalties shall, mutatis mutandis, apply in relation to integrated tax as they apply in relation to central tax”
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