‘Economic offences a class apart’: Rajasthan HC denies bail in Rs. 48 crore fake GST ITC syndicate case

Jaipur: The Rajasthan High Court has rejected a bail plea in an alleged Rs. 48.41 crore fake GST Input Tax Credit syndicate case. The Court held that economic offences are a class apart, and that length of custody alone cannot justify release on bail. Justice Praveer Bhatnagar passed the order on 18 April 2026 in the bail application of accused Hansraj Gurjar.

The bench also held that Section 480(6) of the Bharatiya Nagarik Suraksha Sanhita, 2023 does not create an absolute right to bail. That provision lets an undertrial be released if the trial is not concluded within 60 days. But in a serious economic offence, a judge can still refuse bail for reasons recorded in writing.

Hansraj Gurjar, 32, a resident of Kishangarh in Ajmer district, is an accused in case No. DGGI/INT/INTL/755/2025-Gr-N registered by the Directorate General of GST Intelligence (DGGI), Jaipur Zonal Unit. He faces charges under Section 132(1)(a), (f), (h) and (l) of the Central Goods and Services Tax Act, 2017. These clauses punish the issue of fake invoices and the availment of Input Tax Credit without actual supply of goods. He has been in judicial custody at Central Jail, Jaipur, since 13 August 2025.

According to the DGGI, Gurjar was an active participant in a syndicate that created fake firms by misusing other people’s identities. The syndicate allegedly generated bogus invoices, e-way bills and transport documents without any real movement of goods. Two transport companies shown in the papers — M/s Shri Mahadev Transport Company and M/s Har Har Mahadev Logistics — were found to be non-existent. The DGGI estimates the tax evasion at around Rs. 48.41 crore on a taxable value of Rs. 2.68 crore.

Earlier bail pleas were rejected by the trial court on 19 September 2025 and by the Additional Sessions Judge No. 9, Jaipur Metropolitan-II, on 14 October 2025. A coordinate bench of the High Court had also rejected bail for co-accused Narender Choudhary on 28 November 2025.

Senior Advocate Madhav Mitra, appearing for Gurjar, argued that his client had been falsely implicated. The department’s case, he said, rested primarily on statements of co-accused recorded under Section 70 of the CGST Act. There was no independent corroborative material linking Gurjar to the syndicate. Counsel also pressed the triple test — no criminal antecedents, permanent residence, no flight risk. Continued custody would amount to an unwarranted curtailment of personal liberty under Article 21.

Senior Advocate Kinshuk Jain, standing counsel for the DGGI, opposed the plea. He submitted that WhatsApp chats recovered from Gurjar showed goods worth Rs. 63 crore were covertly moved through M/s Rajasthan Granite Marble and M/s Ganesh Enterprises between January and July 2025. Estimated evasion on that leg alone was Rs. 11.34 crore. Gurjar was not a facilitator but the “mastermind” behind the sham documents. Section 480(6) of the BNSS is not mandatory, especially under a special statute like the CGST Act.

Justice Bhatnagar held that the material on record — documents, statements of co-accused recorded under Section 70 of the CGST Act, and WhatsApp chats — prima facie showed that Gurjar was actively operating more than two firms as part of the alleged syndicate. Movement of goods worth several crores had allegedly been routed through fictitious transport entities in which he had a financial interest.

The bench described the case as “a stark example of white-collar crime that impacts the economy”. It relied on the Supreme Court’s ruling in Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439. The apex court in that case had observed: “Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail.” In practice, this means the usual principle that “bail is the rule, jail the exception” does not apply with the same force in large-scale economic fraud.

On the petitioner’s reliance on Section 480(6) BNSS, the Court drew on the Supreme Court’s 2025 ruling in Subhelal v. State of Chhattisgarh, (2025) 5 SCC 140. That ruling interpreted the corresponding provision in the old Code — Section 437(6) of the CrPC. The apex court had held that the provision “cannot be considered to be mandatory in nature and cannot be interpreted to grant an absolute and indefeasible right of bail”. The bench held that the same logic applies to Section 480(6) BNSS. It empowers a court to grant bail when trial is delayed, but also allows refusal for recorded reasons.

The Court also examined Section 479 of the BNSS. This provision caps the maximum period an undertrial can be detained. An undertrial must be released after serving half the maximum sentence for the offence. A first-time offender must be released after serving one-third. In plain terms, because the maximum punishment under Section 132 of the CGST Act is five years, a first-time offender like Gurjar could lawfully be held up to one-third of that period. He has not yet crossed that threshold.

The bench rejected the argument that delay in trial alone entitled the petitioner to bail. It held that “mere length of incarceration, in absence of any other mitigating circumstances, does not entitle the petitioner to be enlarged on bail”. This is all the more so when the allegations involve a serious economic offence with substantial loss to the public exchequer.

The bench took into account the nature and gravity of the offence, the magnitude of the alleged evasion, the material collected during investigation and the rejection of bail to the similarly placed co-accused Narender Choudhary. It declined to enlarge Gurjar on bail. S.B. Criminal Miscellaneous Bail Application No. 16428/2025 was dismissed.

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