Patna High Court declines anticipatory bail in large-scale GST invoice fraud involving 857 invoices

Background of the case

The matter before the Patna High Court concerned an application for anticipatory bail filed by Avinash Kumar S/o Suresh Prasad @ Suresh Prasad Jaiswal Vs State of Bihar. The proceedings arose out of Patliputra P. S. Case No. 421 of 2025, where serious economic offences had been alleged in connection with fake GST billing and misappropriation of funds.

The criminal case was registered for offences punishable under Sections 318(4), 316(2), 336(3), 338, 340(2), 351(2), 352 and 3(5) of the Bharatiya Nyaya Sanhita. The prosecution narrative was that the petitioner, in concert with other accused individuals, carried out a fraudulent scheme by generating fake GST invoices and using forged documents to siphon off corporate funds.

At the core of the allegations was a claimed defalcation of Rs. 6.60 crores, said to have been diverted from a private limited company to a proprietorship concern controlled by the petitioner, accompanied by the issuance of 857 GST invoices.

Allegations by the prosecution

Nature of the alleged economic offence

According to the State and the informant, the petitioner, while occupying a position of confidence and control within the company, orchestrated a structured plan to commit financial fraud. The key allegations included:

  • Issuance of fake GST bills
  • Use of forged documentation to support these invoices
  • Diversion of corporate funds to a proprietorship concern owned by the petitioner
  • Abuse of fiduciary position amounting to:
    • Criminal breach of trust
    • Cheating
    • Forgery
    • Economic fraud of substantial magnitude

The specific assertion was that an amount of Rs. 6.60 crores was transferred from M/s Hopecon Infra Projects Pvt. Ltd. to M/s Hope Traders, a sole proprietorship concern belonging to the petitioner. This transfer was projected by the prosecution as being entirely for the purpose of wrongful gain and misappropriation.

GST invoice pattern and timing

The case prominently featured a detailed GST invoice trail, which the prosecution relied upon to demonstrate the systematic nature of the alleged fraud. The High Court was informed that:

  • A total of 857 invoices were raised by the petitioner’s proprietorship concern
  • Out of these:
    • 583 invoices pertained to October 2024
    • 274 invoices were raised in January 2025
  • These invoices, collectively, represented a value of Rs. 5.84 crores
  • The invoices were filed in the month of February 2025 against M/s Hopecon Infra Projects Pvt. Ltd.

The prosecution’s case was that these invoices were not genuine commercial transactions, but were instead concocted documents intended to facilitate misappropriation and give a colour of legitimacy to transfers of funds out of the company.

Subsequent recall of invoices

An important circumstance raised by the prosecution was that the GST invoices were subsequently recalled by the petitioner’s concern. As per the State and the informant, this recall did not arise from a bona fide correction, but:

  • Happened only after the intervention of the informant, who was a director in the company
  • The recall was justified by the petitioner’s side as an “inadvertent mistake”, which the prosecution contested as a mere cover-up after discovery

This sequence of events was cited to demonstrate not only the petitioner’s role as the main architect of the alleged scheme, but also his attempt to roll back the fraudulent acts when confronted.

Criminal antecedents of the petitioner

The State further argued that the petitioner was not a first-time offender.