2600 Firms Formed Using Forged GST Numbers to Defraud State: Allahabad HC Rejects Bail Plea of Accused [Read Order]

The Allahabad High Court has rejected the bail application of an accused allegedly involved in a massive racket where approximately 2,600 firms were created using forged GST numbers to defraud the state exchequer.

The case pertains to crime registered under multiple sections including cheating, forgery, and criminal conspiracy.

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According to the prosecution, the fraud came to light when the complainant discovered misuse of their GST registration number, which was then found to have been used as part of a larger syndicate fabricating fake firms to claim illicit Input TaxCredit (ITC) benefits.

The court noted that the scale of the fraud not only defrauded the state of legitimate tax revenue but also posed a serious threat to the economy.

Rejecting the bail plea, Justice Arun Kumar Singh Deshwal observed that economic crimes of such magnitude require strict handling.

The court noted that such offences must be treated strongly to guarantee punishment against extensive tax fraud by noting that bail pleas of co-accused in similar roles had previously been denied by a coordinate bench.

The high court noted that “Considering the fact that the accused is involved in economic crime by committing serious fraud which has resulted to defraud the State from GST and to get illegal benefit of Input Tax Credit and the bail application of the other co-accused persons have been rejected by a coordinate of this court, therefore, applicant is not entitled to be released on bail. Accordingly, present application is rejected.”

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