Proprietorship in Another Person’s Name: Chhattisgarh HC Grants Regular Bail in ₹7.59 Crore Fake ITC Case [Read Order]

The Chhattisgarh High Court granted regular bail to a person in a Central Goods andServices Tax (CGST) case involving alleged fraudulent availment and passing of Input Tax Credit of Rs. 7.59 crore.

The applicant, Aman Singh, had filed his first bail application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita. He was arrested in connection with an offence punishable under Section 132 of the CGST Act, 2017.

The prosecution alleged that Hindustan Corporation, a proprietorship firm in the name of Sanyasi Jagat, fraudulently availed ITC without receiving goods from bogus or non-existent suppliers. The department alleged that the firm later passed on the same ITC to downstream entities without supplying actual goods. The alleged fraudulent invoices were for Rs. 7,59,25,127.

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The department further alleged that during a search at the premises of Khyati Enterprises, belonging to the applicant, Sanyasi Jagat was found present. His statement was recorded and he named the applicant, saying that the firm was established on the applicant’s directions.

The applicant’s counsel argued that he was innocent and had no connection with the alleged offence. He argued that the essential ingredients of Section 132 of the CGST Act were absent and no prima facie case was made out. The counsel also argued that there was no document showing that the applicant was the proprietor of Hindustan Corporation, as the firm stood in the name of Jagat Sanyasi.

The DGGI opposed bail. The DGGI argued that statements and bank records showed links between Hindustan Corporation, Khyati Enterprises and Samriddhi Trading. They submitted that around Rs. 4.93 crore was transferred from Khyati Enterprises to Hindustan Corporation, while only Rs. 24.5 lakh was returned.

The DGGI further argued that the applicant avoided summons and later admitted facilitating transactions, handling invoices through WhatsApp, assisting in GST return filing and carrying out financial transactions of around Rs. 5.15 crore.

Chief Justice Ramesh Sinha observed that the proprietorship of Hindustan Corporation admittedly stood in the name of Jagat Sanyasi. The court also observed that no unimpeachable document had been pointed out at the bail stage to conclusively establish that the applicant was the proprietor of the firm.

The court held that whether the material was enough to prove conscious involvement, beneficial ownership or criminal intent required detailed examination during trial. It also observed that the applicant had been in jail since 14.03.2026, investigation had substantially progressed, documents and electronic evidence had been seized, and further custodial interrogation did not appear necessary. The bail application was allowed on a personal bond of Rs. 1 lakh with one solvent surety.

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