The Allahabad High Court has granted bail to an accused in a massive ₹2645.29 crore GST scam on conditions considering nature of the offence, the punishment and the material available on record and non availability of any device by using which fake firms are said to be created.
The case, involving the creation of fake firms and issuance of bogus invoices, was brought forward by the Directorate General of GST Intelligence (DGGI), Ghaziabad Unit, under various sections of the Central Goods and Services Tax (CGST) Act, 2017.
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In a police operation in NOIDA on May 31, 2023, which uncovered a large-scale racket involved in the creation of over 3,100 fictitious firms and the issuance of fraudulent invoices without any actual supply of goods or services. Investigations revealed that these bogus entities fraudulently claimed Input Tax Credit ( ITC ) amounting to ₹2645.29 crores, of which ₹163.50 crores has been confirmed as fake ITC.
Following the police operation, the DGGI took over the investigation, identifying 22 key “mother” firms that played a central role in the scam. These firms were found to be non-existent during inspections. The applicant, along with other individuals involved, was arrested, and his role in establishing fake companies and facilitating fraudulent invoices was revealed during judicial custody.
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The bail applicants – accused’s counsel argued that nothing was recovered from his possession, and the case against him was based primarily on confessional statements made by others.
His counsel also pointed out that no GST liability or penalties have been assessed against Batra, and that the offences under the CGST Act are punishable by up to five years and are compoundable. The accused has been in jail since July 19, 2023, and his lawyer assured the court that he would not misuse his bail, citing the bail granted to co-accused, who had a more serious role in the scam.
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Justice Nalin Kumar Srivastava, considering the arguments stated that “Having regard to the entire facts and circumstances of the case, the nature of the offence, the punishment and the material available on record and none availability of any device by using which fake firms are said to be created and the fact that co-accused Gaurav Singhal having more serious role has been released on bail by the coordinate Bench of this Court, and without expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail. The bail application is allowed.”
The court set several conditions, including that Batra must not tamper with evidence, pressure witnesses, or engage in similar criminal activities. He is also required to surrender his passport and not leave the country without the court’s permission. Any breach of these conditions could result in the cancellation of his bail. It was clearly stated that the conditions outlined apply solely to the bail decision and shall not influence the trial court’s final judgment on the matter.
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