Mobile Linked to Fake GST Firm Recovered from Accused: Allahabad HC Denies Bail [Read Order]

The Allahabad High Court denied bail to an accused in a Goods and Services Tax (GST) fraud case after observing that a mobile phone linked to a fake GST firm was recovered from him, showing prima facie involvement in tax evasion.

Dilshad Malik, the applicant, filed a bail application for case registered under Sections 420, 467, 468 and 471 IPC at Police Station Lohamandi, Agra. His earlier bail application had been rejected by the Sessions Court and he was in custody since 27.12.2025.

The case relates to a fake firm Sharma Enterprises, which was found to be non-existent at the registered address and allegedly used for GST evasion. The FIR initially named Arpit Sharma as proprietor of the firm.

The applicant’s counsel argued that the applicant was not named in the FIR and had no connection with the fake firm. They argued that no incriminating documents such as fake invoices, GST records or computers were recovered from him and the case is based only on recovery of mobile phones which is not reliable as there were no independent witnesses.

They also argued that the applicant is engaged in scrap and real estate business, has no criminal history, and a co-accused has already been granted bail, so he should be given bail on parity.

The State argued that the applicant is the main person involved in the fraud and a mobile phone recovered from his premises was linked to the GSTIN of the fake firm. They argued that this establishes his involvement in creating and operating the bogus GST firm and he along with others caused large scale tax evasion. The State further argued that if released on bail, he may again indulge in similar offences.

Justice Ashutosh Srivastava observed that during the raid, a mobile phone used in GST registration along with other materials connected with the offence was recovered from the applicant’s premises. It observed that from the material collected during investigation, prima facie involvement of the applicant cannot be ruled out. The court also observed that parity alone is not sufficient ground for bail and the role of each accused has to be considered separately.

The court pointed out that the allegations are serious in nature involving tax evasion and there is no reason to believe that the applicant has been falsely implicated. It explained that at this stage detailed examination of evidence is not required, but the available material shows involvement of the applicant.

In view of the facts and circumstances, the court held that no ground for bail is made out and rejected the bail application.

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