Patiala House Court grants Bail to Accused in Rs. 75 Cr Fake GST ITC Fraud Case [Read Order]

The Patiala House Courts, New Delhi, allowed metals entrepreneur Het Ram Sharma to anticipatory bail in an alleged ₹75 crore fake input-tax-credit (ITC) racket, observing that the prosecution had shown no “extraordinary circumstance” to justify custodial interrogation.

Special Judge Chander Jit Singh (ASJ-03), while disposing Bail Matter under section 132 of the GST Act, recorded that Sharma, director of M/s Rajnandini Metal Ltd., had already appeared before the Directorate General of GST Intelligence (DGGI) and answered 16 questions on 15 February, a day after officers searched his Faridabad factory and residence.

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The Court noted that the DGGI’s case rests “primarily on documentary material” and that comparable co-accused have been arrested on similar allegations without any showing that Sharma’s cooperation was deficient.

According to the prosecution, Sharma orchestrated a circuitous billing scheme through three paper entities—M/s Ashirwad Metal Traders, Sh. Mahaveer Metal and M/s Balaji Metal Trader—to circulate copper scrap purchased off-market, raise bogus invoices and pass on ineligible ITC to Rajnandini Metal, draining roughly ₹75 crore from the exchequer. The Department insists Sharma is the “ultimate beneficiary” who ignored four to five summonses.

Appearing for the applicant, senior advocate Ramakant Kaur led a defence team of Snhea Arya, Harshil Gaur, Meenakshi Sahu, Roopini Nandam, Sobiya Manzoor and Pankhuri Tiwari. They invoked Gurbaksh Singh Sibbia, Sushila Aggarwal and the recent Supreme Court ruling in Vineet Jain v. Union of India to stress that anticipatory bail is the rule where the maximum sentence is five years and the suspect has cooperated. Sharma, they argued, is a law-abiding income-tax assessee who filed regular GST returns, joined the probe on the very first summons and poses no flight risk.

Opposing the plea, DGGI counsel Karan Aggarwal cited SFIO v. Aditya Sarda and allied precedents to contend that the quantum involved and Sharma’s alleged evasion of summons warranted immediate custodial questioning. He maintained that the three intermediary firms existed solely to generate fictitious credits and that digital as well as human evidence pointed to a premeditated fraud exceeding the ₹5-crore threshold that permits arrest under Section 69.

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Judge Singh rejected the State’s objections, remarking that the Department itself had yet to decide on arrest and had not contested the truthfulness of the applicant’s statement. Citing the Supreme Court’s guidance that prolonged incarceration for documentary offences should be avoided absent exceptional factors, the Court held that Sharma’s apprehension of arrest was reasonable but detention unnecessary.

Anticipatory bail was therefore granted on a ₹2,00,000 bond with a like surety from a blood relative, subject to conditions that he appear when summoned, remain in India, preserve six months of mobile data and abstain from tampering with evidence. The order expressly disclaimed any opinion on merits.

To Read the full text of the Order CLICK HERE

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