Anticipatory Bail Denied in ₹425 Cr GST Fake Billing Case: P&H HC says Custodial Interrogation Needed to Uncover Modus Operandi and Network [Read Order]

The Punjab and Haryana High Court has denied anticipatory bail to the accused involved in Rs. 425 crore GST fake billing case stating the necessity of custodial interrogation to unearth the full extent of the fraudulent network and modus operandi.

The Court, presided over by Justice Arvind Singh Sangwan, dismissed the twin bail applications moved by the petitioner, noting that his involvement appeared substantial and sophisticated, with wide-reaching financial and operational implications.

The petitioner was alleged to have orchestrated a complex web of fictitious firms and shell entities that issued fake invoices without any actual movement of goods. The case emerged from investigations by the Central Goods and ServicesTax (CGST) Commissionerate, Ludhiana, which uncovered that the petitioner had control over multiple firms and bank accounts linked to massive input tax credit (ITC) frauds. Authorities claimed that ITC was wrongfully availed and passed on to the tune of ₹478 crore, with false billing alone amounting to ₹425 crore.

Despite the petitioner’s claim that he had no ownership or formal connection with the implicated entities, the department produced evidence of blank cheques, multiple bank cards, and linkages to shell companies allegedly managed by him. His connection to several firms registered on the mobile number of a co-accused and the possession of documents and credentials of various fictitious entities further reinforced suspicions of deep-rooted involvement.

The Court also took note of statements by co-accused individuals, Rajinder Singh and Sandeep Kumar Puri, which pointed toward the petitioner’s central role in the scam. While, rejecting the petitioner’s contention that he was being framed due to personal enmity and that his custodial interrogation was unnecessary, the Court said that the scale of the fraud, the involvement of numerous fictitious business entities, and the need for in-depth investigation to identify the larger conspiracy and other beneficiaries.

Justice Sangwan observed that a case involving such enormous fraud, which crosses the threshold of ₹5 crore under the CGST Act, justifies arrest under Section 69 read with Section 132 of the Act.

The Court also noted that anticipatory bail cannot be used as a shield in cases where investigation into a financial conspiracy is ongoing, particularly when it involves complex trails of fake transactions, dummy firms, and substantial evasion of taxes that harm public revenue.

The bench, in its order ruled that “After hearing learned counsel for the parties, without making any comment on the merits of the case, considering the aforesaid facts and circumstances, I find that the custodial interrogation of the petitioner is required to find out the modus operandi of the petitioner as well as involvement of other persons.”

Accordingly, both anticipatory bail petitions were dismissed.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates