GST Fraud Case Involving Rs. 7.59 Crore Fake ITC: High Court Grants Bail, Says Ownership Role Yet to Be Proven

The Directorate General of GST Intelligence alleged that Aman Singh was instrumental in operating M/s Hindustan Corporation, a firm accused of fraudulently availing and passing on Input Tax Credit (ITC) of Rs.7.59 crore through bogus invoices without actual movement of goods. The department relied on statements recorded during investigation, financial transactions between M/s Hindustan Corporation and the applicant’s proprietorship concern, M/s Khyati Enterprises, and allegations that the applicant controlled the firm’s operations.

The applicant argued that he was not the proprietor of M/s Hindustan Corporation, which stood in the name of Jagat Sanyasi, and that no documentary evidence established his ownership or direct involvement. It was further contended that the principal accused had not been arrested and that he had been in custody since 14 March 2026.

The DGGI opposed bail, pointing to statements of witnesses, bank transactions exceeding Rs.4.93 crore between the two entities, and the applicant’s alleged non-cooperation with summons. According to the department, these circumstances demonstrated his active role in the fraudulent ITC network.

The High Court of Chhattisgarh observed that although the prosecution alleged the applicant controlled and operated the firm, the proprietorship admittedly stood in the name of another person and no unimpeachable document had been produced at the bail stage to conclusively establish that the applicant was the proprietor. The Court held that issues relating to beneficial ownership, conscious involvement, and criminal intent would require detailed examination during trial and could not be finally determined while considering bail.

Taking note of the fact that the applicant had remained in custody since 14 March 2026, that the investigation had substantially progressed, relevant documents and electronic evidence had already been seized, and no further custodial interrogation appeared necessary, the Court granted regular bail upon furnishing a personal bond of Rs.1 lakh with one solvent surety.

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