How to Return PageReference from a webservice method

In your Class use a String as a Returntype
and create your reference like this in your webservice class

return String.valueOf( new PageReference('/'+Case.Id).getUrl());

and in your Button, you have to catch your return String and reload the page:

var newurl = sforce.apex.execute("TestClass","CreateTestRecords", {id:"{!Case.Id}"});
parent.location.href = newurl; //refresh the page