Allahabad HC Denies Bail to GST ITC Fraud Accused, Cites Co-Offender’s Bail Rejection & Risk of Evidence Tampering [Read Order]

In a recent ruling, the Allahabad High Court denied bail to GST Input Tax Credit ( ITC ) fraud accused citing the rejection of a co-offender’s bail as evidence of strong charges and the high risk of tampering with evidence and witnesses.

Sanjay Jindal, the applicant, was arrested for allegations of creating over 2600 fake GST firms using stolen Aadhaar and PAN details to fraudulently claim ITC worth Rs. 4,000 crores. FIRs were filed under sections 420, 467, 468, 471, and 120-B of the IPC. Evidence, including fake invoices, forged documents, SIM cards, and electronic devices, was collected during the investigation. Confessional statements from the co-accused further implicated him as involved in the operation.

The Future of Tax and Finance: Upskill with Us

The accused side argued that the accused was falsely implicated and had no direct connection to the fraudulent activities. They sought parity with co-accused who had been granted bail. However, the prosecution countered by explaining the severity of the offense, the organized nature of the fraud, and the public interest involved.

The bench comprising Justice Manju Rani Chauhan and Justice Rahul Goswami found that the charges under the IPC, including forgery, cheating, and conspiracy, were prima facie made out against the accused. The investigation revealed that fake firms, such as YOYO Traders and AKS Traders, were linked to the accused and were used to siphon funds.

The court relied on various precedents such as Y.S. Jagan Mohan Reddy v. CBI (2013) which categorized economic offenses as grave crimes requiring a different/ stricter approach to bail. It also cited Nimmagadda Prasad v. CBI (2013) which explained that bail should be denied where there is a risk of tampering with evidence or further harm to public interest.

The Future of Tax and Finance: Upskill with Us

While hearing the bail application, the court observed the rejection of a discharge application for one of the co-accused as it indicated a strong prima facie case supported by credible evidence. It also observed the risks of tampering with evidence and witnesses if bail were granted.

The court ruled that the accusations against Sanjay Jindal were serious and supported by much evidence, including confessions from co-accused and material recovered during investigations. So, the court rejected the bail application.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates