Delhi HC upholds Bail to Accused of Filing GST Input Credit Claims for non-existent Firms [Read Order]

The Delhi High Court today upheld the bail granted to Sanjeev Malhotra, a director of M/s Best Buildwell Private Limited, who was accused of filing fraudulent Goods and Services Tax ( GST ) input credit claims for non-existent firms.

The court dismissed the petition filed by the Commissioner of Central Goods and Services Tax, South Delhi, seeking the cancellation of bail.

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Justice Anish Dayal, presiding over the matter, observed that there was no compelling reason to revoke the bail granted to Malhotra by the Additional Sessions Judge ( ASJ ) at Patiala House Court in January 2024. The bail had been granted during an early stage of the investigation.

The allegations against Malhotra pertain to the years 2017-2018, during which his company allegedly claimed input tax credits from firms that were later found to be non-operational. A surprise search conducted by the department in January 2024 did not uncover any incriminating material or stock discrepancies.

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Despite the early stage of the investigation, Malhotra had joined the investigation and was interrogated for 12 hours before being arrested. The trial court granted bail based on the nature of the case, which primarily involves documentary evidence, and the fact that the accused had complied with the conditions set by the court, including the deposit of 10% of the alleged amount, approximately ₹7.29 crores.

The High Court noted that the investigation into the case is ongoing, particularly the verification of the firms and transporters involved. However, it was emphasised that the accused had cooperated with the investigation and there was no indication of non-compliance with court orders.

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The court held that there was no merit in cancelling the bail at this stage and dismissed the petition. The department was granted the liberty to approach the trial court in the event of any breach of bail conditions by the accused.

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