Fraudulently Availing ₹10 Crores ITC: Gujarat HC Grants Bail on surety [Read Order]

Sunil Hiralal Mandowara, the applicant has filed the application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 for enlarging the applicant on regular bail in connection with the offence registered with the Office of the Directorate General of GST Intelligence (DGGI), Ahmedabad.

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The applicant has been arrested in connection with the present offence on 17.12.2024 and since then he is in custody. It is alleged against the applicant that the applicant had illegally obtained the benefit of Input Tax Credit. It is the case of the prosecution against the applicant that he had shown fictitious transactions of purchase of goods with a view to claim the benefit of Input Tax Credit.

However, the transactions which have shown by the applicant were not fictitious. The applicant had actually purchased goods from several firms. After the purchase of goods by the present applicant from those firms, due to some lapses on the part of those firms, their GST registration came to be canceled for which the applicant cannot be said to have played any role. He submitted that the offence alleged against the applicant is punishable with imprisonment for a period of 5 years.

The applicant has already undergone incarceration for a period of almost 8 months. He has further submitted that the applicant has good reputation in the society and no useful purpose would be served by keeping the applicant in Jail for indefinite period. It is further contended that the applicant is ready and willing to abide by all the conditions that may be imposed by this Court if released on bail.

The application contending that the applicant herein initially created forged firms on the basis of the documents like Aadhar card, Pan card etc., and thereafter, had shown fictitious transactions with those firms and had claimed Input Tax Credit worth more than Rs.10 crores and after the purpose was served, the registration of the firms created as above, was canceled.

The prosecution against the applicant that he had claimed the benefit of Input Tax Credit by showing some fictitious transactions on record, though actually the applicant had not purchased any such goods from any of the firms in question. As per the case of prosecution, it was the present applicant himself who had created those firms and had obtained the benefit of Input Tax Credit.

The offence alleged against the applicant is punishable with imprisonment up to 5 years. The applicant was arrested in connection with the present offence in the month of December 2024 and since then he is in custody. Having regard to these aspects, the present application deserves considerations and hence, the present application is hereby allowed.

Considering the facts of the case, nature of allegations, gravity of accusation, availability of the applicant accused at the time of Trial etc. and the role attributed to the present applicant accused, the single bench of Justice M. R. Mengdey allowed the application.

The applicant accused is ordered to be released on bail in connection with the aforesaid FIR on executing a personal bond of Rs.10,000/- with one surety of the like amount to the satisfaction of the trial court.