The Supreme Court has granted bail to two persons accused of issuing fictitious invoices to enable fraudulent input tax credit, in a case registered by Uttar Pradesh Police under the Bharatiya Nyaya Sanhita, 2023. In Ankit Johri v. State of U.P. (Criminal Appeal No. 3339 of 2026), reported on 29 July 2026, the Court set aside the High Court’s order of 16 April 2026 refusing bail.
What was decided
The FIR was registered at Police Station Jaswant Nagar, District Etawah, under BNS provisions including Sections 318(4), 336(3), 338, 340(2) and 61(2), read with Section 3(5). The appellants had been arrested on 3 February 2026. The Court granted bail mainly because they had been in custody for more than five months and the charge-sheet had been filed, and directed release on terms to be fixed by the Magistrate.
The Court left open the larger question whether a person can be prosecuted under the general criminal law when Sections 69, 132, 134, 135 and 138 of the GST law provide a specific framework for arrest, prosecution and compounding. It said this would be decided in a suitable future case.
Why it matters
In Uttar Pradesh, fake-firm and fake-invoice cases are frequently pursued through police FIRs for cheating and forgery, alongside GST proceedings. A police FIR carries different consequences from a GST case: arrest and bail are governed by the BNSS, and the safeguards built into the GST law, such as the Commissioner’s reasons to believe, do not automatically apply.
Whether the special GST framework excludes such FIRs remains undecided. Until the Supreme Court rules, persons facing both tracks should prepare for each separately. The GST Council’s 8 October 2026 recommendation to omit GST arrest powers does not affect police cases under the BNS.
Practical points
- Check whether an FIR has been registered in addition to GST summons or notices, and obtain a copy.
- Keep records establishing actual movement of goods: e-way bills, transport receipts, payments and stock registers.
- Where custody follows, the stage of investigation and filing of the charge-sheet are relevant to bail.
- Preserve the argument on the special GST framework, since the Supreme Court has kept it open.
Sources: TaxCode, 29 Jul 2026; A2Z Taxcorp, 31 Jul 2026.
For a confidential discussion on fake ITC allegations and GST-related FIRs, see GST Investigation, Summons & Arrest Lawyer.
General legal information only; not legal advice or solicitation.
