Allahabad HC Grants Bail to GST Fraud Accused Over Passing Fake ITC on Ground of Parity [Read Order]

The Allahabad High Court has granted bail to the accused in a major GST (Goods and Services Tax) fraud case involving the alleged passing of fake Input Tax Credit ( ITC ).

The bench of  Justice Nand Prabha Shukla was granted bail on the ground of parity, considering that two co-accused had already been granted bail in the same case.

The bail application, filed by accused - applicant under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, sought release in Case registered under Sections 132(1)(b), 132(1)(c), and 132(1)(i) of the Central Goods and Services Tax Act, 2017, pending trial.

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The allegations against the accused - applicant was from a complaint filed by the Directorate General of GST Intelligence (DGGI), Ghaziabad, stating that bail applicant, along with others, was involved in issuing fake invoices without actual supply of goods, thereby fraudulently availing and passing on substantial amounts of ITC.

Investigations revealed that the accused - applicant, through five firms, had allegedly availed fraudulent ITC amounting to ₹67.47 crores and passed on ₹63.57 crores. Despite the serious nature of the allegations, the Court noted that the applicant had no prior criminal history and had been in custody since 17.10.2024.

During the hearing, the facts and circumstances relating to bail applicants were similar to those of co-accused, who were already granted bail by a co-ordinate bench on 25.02.2025.

The Court also observed that while the prosecution alleged a massive GST fraud amounting to ₹885 crores involving 143 fake firms and 1267 beneficiary entities, there was a lack of direct evidence linking the applicant to the broader network, apart from his confession recorded under Section 70 of the GST Act, 2017. Furthermore, the trial had not yet commenced and was expected to take considerable time to conclude.

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Considering these factors, including the applicant’s prolonged incarceration and the principle that "grant of bail is a rule and its denial an exception," the Court found it appropriate to grant bail.

The court ruled as follows “Considering the facts and circumstances of the case, without expressing any opinion on the merits of the case and considering the ground of parity of the applicant with the co-accused Vikrant Singhal and Sachin Singhal, the bail application is allowed on the same terms as of the order of the co-accused passed in Criminal Misc Bail Application No.45540 of 2024 (Vikrant Singhal and Another vs. Union of India) on 25.02.2025.”

The court granted regular bail furnishing the requisite bail bonds and surety to the satisfaction of the trial Court. It is further directed that the accused-applicant shall also abide by terms and conditions of the bail, which shall be imposed by the trial Court at the time of acceptance of his bail bonds and surety.

To Read the full text of the Order CLICK HERE

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