AP HC Grants Bail to GST-Registered Traders Linked to ₹3.18 Crore Fake Stock Purchase [Read Order]

In a recent ruling, the Andhra Pradesh High Court has granted anticipatory bail to four GST‑registered traders accused of links to a ₹3.18 crore fake stock purchase scheme involving the alleged diversion of goods from a private company.

The petition was filed by G Rajitha along with other petitioners, under Section 482 of the Bharatiya Nagarik Suraksha Sanhita(BNSS), 2023, seeking pre‑arrest bail in connection with an FIR registered at Tenali Rural Police Station. The FIR alleged offences under Sections 318(2), 318(4), 336(2), 338, 340(2), 61(2) read with 3(5) of the Bharatiya Nyaya Sanhita, 2023.

The petitioner's counsel argued that no offence could be attributed to them, stressing they were independent traders who had simply purchased stock from Accused No.1. It was pointed out that Accused No.2 was his wife, but the petitioners themselves were not named in the FIR and had no role in the alleged fraud.

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Each petitioner was running a separate GST‑registered business with proper accounts, which the investigating agency could verify at any time. The counsel also pointed out that the investigating agency can examine their accounts at any point in time, and they were willing to cooperate fully with the investigation and furnish sureties as required.

On the other hand, the respondent counsel pointed out that the petitioner cheated and committed criminal breach of trust and caused loss to the company to the tune of Rs. 3.5 crores, and they also said that the investigation is not completed.

After concerning the arguments and submissions, the High Court noted that there are no specific attributions made against the petitioners touching the offence of cheating, misappropriation, breach of trust, fraud or forgery.

Also noted that they were long-standing GST‑registered traders who had purchased stock bona fide, with no incriminating material linking them to the alleged fraud beyond their commercial relationship with Accused No.1. Observing that their role was limited to business transactions.

The bench Justice Venkata Jyothirmai Pratapa granted anticipatory bail subject to conditions and clarified that these observations were confined to the bail stage and not on the merits of the case, while allowing the criminal petition and closing pending applications.

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