Allahabad HC Grants Bail in Rs. 32 Crore GST Fake ITC Case, Citing Documentary Evidence and Delay in Trial:

Allahabad HC Grants Bail in Rs. 32 Crore GST Fake ITC Case, Citing Documentary Evidence and Delay in Trial In a recent case in the Allahabad High Court, judges have granted bail to a businessman alleged to have claimed and passed ITC (Input Tax Credit) of more than Rs. 32 crore by establishing bogus companies. The case is related to a businessman named Dhiraj Nath Gupta, who prayed to the Allahabad High Court to grant him bail. He was accused of setting up shell companies and fraudulently claiming and passing fake GST (Goods and Services Tax) ITC (Input Tax Credit) worth Rs. 32 crore. He was booked under various sections of the CGST Act, where the maximum punishment is 5 years, and the case is handled by a Magistrate, not a higher court.

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The lawyer of the business claimed that the investigation into the matter is already completed and the charge sheet has already been filed. All evidence is documentary, not based on witnesses. The businessman has been in prison for 4 months, since June 22, 2025. He has no past criminal record. The DGGI Ghaziabad opposed their prayer for bail; however, it could not dispute the factual points submitted by the lawyer of the businessman. The court noted that the offence committed by the business is liable for imprisonment of 5 years, and the case needs to be handled by a Magistrate, and since the investigation is already completed, keeping him in jail is not necessary. The case is only based on documentary evidence; hence, the trials will take longer time. To announce its final decision, the high court cited earlier judgments in the cases of the Supreme Court of Vineet Jain, Ratnambar Kaushik, Sanjay Chandra, etc., saying that in GST and economic offence cases based on documents, bail should normally be given unless there are special reasons to deny it. Additionally, the businessman has no criminal history. Therefore, the court concluded to grant business bail.

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Court held, "As per allegation, applicant is a businessmen and he by way of forming fictitious company availed input tax credit of more than 32 Crores and pass the same but it reflects, all the alleged offences are triable by Magistrate and maximum five years punishment has been provided for all the offences. Further, investigation of the case has been concluded and complaint has been filed. Further, considering the fact that entire case of the prosecution is based on documentary evidence, the argument advanced by learned counsel for applicant that trial will take considerable period of time, cannot be ruled out." Thus, in the final order, the high court granted the businessman bail, provided he must appear in the trial court on all dates. He must not threaten or influence anyone or tamper with evidence. He must not engage in any criminal activity. If he disobeys any of these conditions, the prosecution can request cancellation of bail.