Facts of the Case

The applicant, Vikas Dabas, sought regular bail in Case Crime No. 0203 of 2023 registered at Police Station Sector 20, Noida, under Sections 420, 467, 468, 471 and 120-B of the Indian Penal Code, arising from an FIR originally lodged against unknown persons alleging misuse of the first informant's GST number to float a firm without authorisation. Investigation revealed a far larger racket, with about 2,600 firms found to have been created on the strength of forged or misused GST registration numbers purely to defraud the State exchequer through fraudulent availment of Input Tax Credit. A coordinate Bench of the same High Court had already rejected bail to co-accused persons with a similar role in the connected leading Bail Application No.53010 of 2023, decided on 31.08.2024, on the footing that such offences strike at the economy and warrant strict treatment.

Issues Involved

  1. Whether an accused implicated in a large-scale GST-registration-fraud racket, used to fraudulently avail Input Tax Credit, is entitled to bail during the pendency of trial.
  2. Whether prior rejection of bail to similarly-placed co-accused in the same racket is a relevant factor in deciding the present bail application.
  3. Whether the economic and revenue impact of such fraud on the State justifies a stricter approach to bail than in ordinary criminal matters.

Petitioner's Arguments

  • Counsel for the applicant relied on the fact that the FIR was originally registered against unknown persons for misuse of the first informant's GST number, and sought parity/leniency on the ground that the applicant's role should be assessed independently.
  • Reliance was placed on the judgment dated 31.08.2024 in the leading Bail Application No.53010 of 2023 and connected co-accused bail applications, though ultimately that very precedent had gone against similarly-placed accused persons.

Respondent's Arguments

  • The learned AGA opposed bail, submitting that the applicant as well as other co-accused persons were involved in serious economic fraud that defrauded the State through misuse of GST registrations, and that the applicant was therefore not entitled to be enlarged on bail.

Court Order / Findings

  • The Court took note that the case involved a large-scale scheme in which approximately 2,600 firms were floated on forged or misused GST numbers to fraudulently avail Input Tax Credit, and that a coordinate Bench had already rejected bail to co-accused persons with a similar role in the connected matter.
  • Considering that the applicant was involved in economic crime by committing serious fraud that defrauded the State of GST revenue and secured illegal benefit of Input Tax Credit, and noting that bail applications of similarly-placed co-accused persons had already been rejected, the Court held that the applicant was not entitled to be enlarged on bail.
  • The bail application was accordingly rejected.

Important Clarification

  • Courts treat organised GST-registration fraud aimed at fraudulently availing Input Tax Credit as a serious economic offence affecting the national economy, warranting a stricter approach to bail than ordinary property or personal offences.
  • Consistency with bail decisions already rendered for similarly-placed co-accused in the same racket is treated as a significant factor, particularly where the scale of the fraud (here, roughly 2,600 bogus firms) points to systemic, organised abuse of the GST regime.
  • This order is a brief bail ruling rather than a detailed adjudication of GST law, but it illustrates how criminal courts view large-scale ITC-fraud rackets built on misused GST registrations when deciding pre-trial liberty.

Sections Involved

  • Sections 420, 467, 468, 471 and 120-B of the Indian Penal Code – the criminal offences of cheating, forgery and criminal conspiracy invoked in the FIR underlying the GST-fraud racket.
  • GST registration/GSTIN – the identifier misused to float approximately 2,600 bogus firms for fraudulent Input Tax Credit claims, central to the factual matrix though not itself a statutory provision analysed in the order.

Decision – In Favour of

In favour of the State/prosecution — the bail application was rejected, with the Court treating the alleged GST-registration fraud and ITC racket as a serious economic offence warranting continued custody.

Case Details

Court: High Court of Judicature at Allahabad
Case No.: Criminal Misc. Bail Application No. 12025 of 2025 (Neutral Citation No. 2025:AHC:112100)
Coram: Hon'ble Arun Kumar Singh Deshwal, J.
Date of Order: 11.07.2025

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