Six Months Custody is Sufficient; HC Grants Bail in GST ITC Fraud Case.

ORDER

1. Present petition has been filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short ‘BNSS’) for grant of regular bail to the petitioner in Complaint Case No. COMA/61/2025 dated 10.6.2025 titled ‘Directorate of GST Intelligence v. Aniket Verma’ for the offences punishable under Section 132 read with Section 69 of Central/Haryana Goods & Services Tax Act, 2017.

2. The gravamen of the case set up in the complaint in question (as set out in the present petition by the petitioner) is as follows: –

‘Prosecution case, as per reply to bail application, is that as per information gathered by officers of DGCI, Chandigarh zonal unit, M/s Balaji trading company, GST IN- 02 BCS PV69231Z1 was a fictitious firm engaged in availing and passing on fraudulent ITC, with registered place of business in Parwanoo, district Solan, Himachal Pradesh. Investigation was initiated under section 67(1) CGST Act, 2017 by DGCI, whose officials found the aforesaid address to be locked. Vikas, caretaker for maintenance and cleanliness of the aforesaid firm, informed the police that Aniket Verma, proprietor of the firm was out of town due to some urgent work. Despite being called upon by the DGCI officials, applicant did not appear for inspection, nor submitted documents and statement despite notices. Subsequently, in pursuance of summons dated 3.4.2025, applicant appeared on 11.4.2025. During investigation, it was found that applicant was operating three firms, two in his own name and one in the name of his wife. GST registrations of all the three firms were got suspended by the jurisdictional GST authorities as applicant, through M/s Balaji Trading company, was found involved in availing and passing of fraudulent ITC without actual receipt and supply of goods and services; M/s NV Industrial Corporation was non-existent as a taxpayer in its principal place of business and registration of M/s Aniket Steel and brothers was suspended due to discrepancies in the return filing. The aforesaid three firms were suspended with effect from 3.5.2025, 5.3.2025 and 8.4.2025, respectively. No supply of goods or services had been received or made by any of the said firms and as per the GST returns filed, these firms were only receiving bogus or fraudulent Input tax credit (ITC) without actual receipt of goods or services; the ITC so received was subsequently passed on by these firms to their respective recipients. M/s Balaji Trading company had availed ITC of Rs. 12,47,33,572/- during the financial years from 2023-2025, and had passed on ITC of Rs. 11,68,02,282/- during the said period. M/s Aniket steel and brothers, without actual receipt and supply of goods and services, had availed ITC of Rs.6,02,55,215 – and passed on ITC of Rs. 38214270/- during the aforesaid period and M/s NV Industrial Corporation had availed ITC of Rs. 53,09,206 – and passed on ITC of Rs. 39,29,401 – during the said period without actual receipt and supply of goods or services. Applicant, in his statement, claimed that he worked as scrap trader in Parwanoo, district Solan and made disclosure regarding ITC availed by firms operated by him through various fictitious entities. During investigation, it was found that M/s Balaji trading company had received fake supply through paper invoices amounting to Rs. 69.27 crores from various non-existing entities during the period 202324 and 2024-25 without any actual receipt of goods/servicesfrom the said entities and had availed ITC of Rs. 12.47 crores, benefit of the said ITC was passed on by him to the recipients. Further, M/s Aniket Steel and brothers had received fake supply through paper invoices of Rs. 33.44 crores from various bogus entities during the said period without actual receipt of goods and services therefrom and availed ITC of Rs. 6.02 crores which was passed on to the recipients of the aforesaid firm. Similarly, M/s NV Industrial Corporation, registered in the name of applicant ‘s wife, was created solely to avail a business loan under the stand-up India Mudra scheme and very limited or no business activity was carried out therefrom. Applicant had been operating the three firms ie two in his name and one with the PAN of his wife, he had been availing fraudulent ITC and passing them on to different taxpayers. As per eway bills generated by the suppliers of the applicant and the applicant himself, no actual goods were received from suppliers nor were any goods supplied by the applicant and in some cases, light motor vehicles such as passenger cars, three wheelers and motorcycles were shown as being used to transport goods like MS scrap and cement, whose approximate weight far exceeded the permissible load capacity of these vehicles, rendering such transportation practically impossible. These findings suggested that the applicant undertook the activities merely to fulfil the formal requirements under the CGST Act, 2017 to fraudulently avail the ITC without actual receipt or supply of goods and services, the transactions were fictitious and orchestrated only to claim inadmissible ITC. Fake supply amounting to Rs. 105.6 crores and ITC of Rs. 19.02 crores was passed on by various fictitious entities to the three GST registrations controlled by applicant, ITC of Rs. 19.02 crores availed through the three firms was fraudulent, applicant availed the ITC under the cover of fake invoices without any inward supplies being received; he also generated fake invoices of Rs. 82.2 7 crores from the said firms, to pass on the fraudulent ITC of Rs. 15.89 crores to his recipients/beneficiaries without any actual supply of goods and services, causing loss of Rs. 19.02 crores to the government exchequer. A complaint was filed against the applicant on 10.6.2025 in the Court of Ld.CJM, Panchkula for offences under section 132 (l)(b), (c) CGSTAct, 2017. ‘

3. Learned senior counsel for the petitioner has argued that the petitioner is in custody since 12.4.2025. Learned senior counsel has further argued that the petitioner has been falsely implicated into the FIR in question. Learned senior counsel has iterated that the proceedings are underway against the petitioner wherein pre-charge evidence has been recorded. Learned senior counsel has further iterated that total 9 prosecution witnesses have been cited who are all official witnesses. Learned senior counsel has further argued that the petitioner is a young man with clean antecedents. Thus, regular bail is prayed for.

4. The prosecution has filed a reply dated 18.9.2025. Raising submissions in tandem with the said reply, learned counsel for the respondent has opposed the present petition by arguing that the allegations raised are serious in nature. Learned counsel has further argued that a coaccused namely Shubham Verma, who is brother of the petitioner, is absconding. Learned counsel has further argued that other assessment proceedings in Himachal Pradesh and Ludhiana (Punjab) are pending adjudication against the petitioner. He has, thus, prayed for dismissal of the present petition.

5. I have heard counsel for the parties and have gone through the available records of the case.

6. The petitioner was arrested on 12.4.2025. It is not in dispute that pre-charge evidence is being led before the concerned Court. All the witnesses are official and thus, there is no cause to believe, for the nonce, that the petitioner is in a position to influence the witnesses. The rival contentions raised by learned counsel give rise to debatable issues which shall be ratiocinated upon during the course of trial. This Court does not deem it appropriate to delve deep into these rival contentions, at this stage, lest it may prejudice the trial. Nothing tangible has been brought forward to indicate the likelihood of the petitioner absconding from the process of justice or interfering with the prosecution evidence.

6.1 As per custody certificate dated 18.9.2025 filed by learned counsel for the respondent, the petitioner has already suffered incarceration for a period of about 6 months till date & is not shown to be involved in any other case.

Suffice to say, further detention of the petitioner as an undertrial is not warranted in the facts and circumstances of the case.

7. In view of above, the present petition is allowed. Petitioner is ordered to be released on regular bail on his furnishing bail/surety bonds to the satisfaction of the Ld. concerned CJMZDuty Magistrate. However, in addition to conditions that may be imposed by the concerned CJMZDuty Magistrate, the petitioner shall remain bound by the following conditions

8. In case of breach of any of the aforesaid conditions and those which may be imposed by concerned CJMZDuty Magistrate as directed hereinabove or upon showing any other sufficient cause, the State/complainant shall be at liberty to move cancellation of bail of the petitioner.

9. Ordered accordingly.

10. Nothing said hereinabove shall be construed as an expression of opinion on the merits of the case.