Allahabad High Court Grants Bail to Chinese National in CGST Case, Says Economic Offences Don’t Automatically Justify Prolonged Custody
Court Criticises Customs Officials for Procedural Lapses
Bail Granted Despite Allegations of ₹88 Lakh GST Evasion
By Our Legal Correspondent
New Delhi: February 17, 2026.
In a significant ruling, the Allahabad High Court has granted bail to a Chinese national accused of tax evasion under the Central Goods and Services Tax (CGST) Act, observing that economic offences do not automatically justify prolonged custody. The decision, delivered on February 15, 2026, by Justice Samit Gopal, underscores the principle that bail should not be denied merely because the offence involves financial irregularities.
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The Case: Allegations of GST Evasion
The accused, identified as Alice Lee @ Li Tengli, was arrested in August 2025 in connection with alleged tax evasion by M/s Tentech LED Display Pvt. Ltd., a company linked to her operations in Greater Noida.
Authorities claimed that the company misclassified LED display units and discharged GST at 18% instead of 28%, resulting in a short payment of approximately ₹88.8 lakh between 2019–20 and 2024–25. It was further alleged that manufacturing activities were carried out from undeclared premises.
Court’s Observations
While granting bail, the High Court made several important observations:
- Economic offences not a blanket ground: Merely labelling an offence as “economic” does not justify indefinite custody.
- Documentary nature of case: The allegations are based on records and documents, reducing the risk of tampering with evidence.
- Conditions imposed: The accused must keep the trial court informed of her residence and movements through the Chinese Embassy.
- Criticism of officials: The court strongly objected to the CGST department’s practice of naming Supreme Court judges in affidavits, calling it “totally uncalled for.”
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Impact of the Ruling
The judgment has wider implications for tax enforcement and bail jurisprudence:
- Fair trial rights: Reinforces that bail is a rule, and jail is an exception, even in economic offences.
- Checks on arbitrary detention: Prevents misuse of custody as a punitive tool in financial cases.
- Guidance for lower courts: Sets precedent for balancing seriousness of economic offences with individual liberty.
Reactions
- Legal experts welcomed the ruling, noting that it aligns with the Supreme Court’s consistent stance on bail jurisprudence.
- Tax authorities expressed concern that granting bail may embolden offenders but acknowledged the need to respect judicial directions.
- Human rights advocates praised the decision, saying it protects foreign nationals from excessive detention in India’s legal system.
Broader Context: Bail in Economic Offences
Economic offences, including tax evasion, money laundering, and fraud, are often treated as serious crimes due to their impact on public revenue. However, courts have repeatedly held that bail cannot be denied solely on the gravity of allegations.
The ruling echoes earlier judgments where courts stressed that prolonged pre-trial custody violates Article 21 of the Constitution, which guarantees the right to life and personal liberty.
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What Lies Ahead
The trial against Alice Lee will continue, with the court directing her to cooperate fully. The ruling is expected to influence similar bail applications in CGST and other economic offence cases, ensuring that custody is not misused as punishment before conviction.
Conclusion
The Allahabad High Court’s decision to grant bail to a Chinese national accused in a CGST tax evasion case reaffirms the principle that economic offences do not automatically justify prolonged custody. By balancing the seriousness of allegations with the rights of the accused, the court has strengthened the jurisprudence on bail and reinforced India’s commitment to fair trial standards.
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