The Allahabad High Court granted bail to an accused in a Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) fraud case involving Rs. 264.56 crores, citing the accused’s clean criminal record and noting that the mastermind had already been granted bail by a coordinate bench.
Justice Nalin Kumar Srivastava, after considering the submissions, and the applicant’s lack of criminal history, granted bail.
The case, registered under Sections 132(1)(b), 132(1)(c), and 132(1)(i) of the CGST Act, 2017, pertains to the creation of fake firms and issuance of bogus invoices without the supply of goods or services.
Complete Draft Replies of GST ITC Related Notices, Click Here
The applicant, Dheeraj Saini, was alleged to have worked with Deepak Kumar, the mastermind of the racket, and played an active role in availing and passing on fraudulent ITC through these fake firms.
The investigation revealed that Deepak Kumar controlled 44 non-existent firms and unlawfully availed and passed on ineligible ITC amounting to Rs. 123.38 crores and Rs. 141.18 crores, respectively.
The applicant was linked to these activities through his role in M/s Galaxy Trading Company, where he is accused of availing and passing on fake ITC amounting to Rs. 6.4 crores and Rs. 3.4 crores.
Complete Draft Replies of GST ITC Related Notices, Click Here
Although incriminating evidence was seized during searches at the applicant’s office, Saini’s defense argued that he was merely employed by Deepak Kumar and was unaware of the fraudulent activities.
The counsel of the applicant submitted that no physical evidence was recovered from Saini’s possession, and his involvement was based solely on confessions made by co-accused persons. Moreover, no GST liability had been assessed yet, and the applicant had no prior criminal history. In contrast, Deepak Kumar, who played a more role, was granted bail earlier.
The D.G.G.I. opposed the bail, arguing that the applicant was a key player in the fraudulent operations and that his release might lead to tampering with evidence or further criminal activity.
The department argued that the applicant’s confessional statement, along with incriminating digital devices and records seized during the search, shows his active involvement in the creation of fake firms and fraudulent billing, alongside co-accused Deepak Kumar.
Complete Draft Replies of GST ITC Related Notices, Click Here
Unlike Deepak Kumar, who did not receive a notice, the applicant has already been issued one. The department further highlighted that the case involves the creation of multiple fake companies and a fraudulent amount of Rs. 155 crores. It was contended that if granted bail, the applicant may repeat similar activities and misuse the liberty.
Considering the submissions from both sides, the High Court observed the nature of the offence, the available evidence, and the applicant’s clean criminal record. Notably, co-accused Deepak Kumar, who played more part, had already been granted bail by a coordinate Bench.
Without commenting on the merits of the case, the Court concluded that the applicant had made a sufficient case for bail, and accordingly, the bail application was granted.
The court listed the conditions of not tampering with evidence, intimidating witnesses, or engaging in any further criminal activities, surrendering passport pursuant to the granting of bail.
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