GST Fraud: High Court Grants Bail in Rs 30 Crore Fake ITC Case, Notes 60 Days of Custody and No Complaint Filed

The Telangana High Court granted regular bail to a businessman accused in a GST fraud case involving alleged fraudulent availment and passing of Input Tax Credit (ITC) worth nearly Rs.30 crore. Justice K. Sujana observed that the petitioner had remained in judicial custody for about two months and that no complaint had been filed till the date of consideration of the bail plea.

The petitioner, Faisal Malik, was arraigned as an accused in an investigation initiated by the Directorate General of GST Intelligence (DGGI), Hyderabad Zonal Unit. According to the department, the petitioner, as Managing Partner of M/s. F.K. Metals Traders, was involved in facilitating fraudulent availment and passing of ITC through certain entities purportedly engaged in transactions relating to metal scrap. Based on the allegations, proceedings were initiated for offences punishable under Sections 132(1)(b), 132(1)(c), 132(1)(i) and Section 132(5) of the CGST Act, 2017.

Before the High Court, the petitioner contended that he had been falsely implicated and had no involvement in any illegal activity relating to wrongful availment of ITC. It was submitted that despite there being material regarding the business carried on by him, he had been unnecessarily implicated in the case. The petitioner further highlighted that he had been in judicial custody since 10.04.2026.

The prosecution opposed the bail application, arguing that the petitioner was the mastermind behind the alleged GST fraud. It was contended that the case involved issuance of fake invoices and wrongful ITC transactions amounting to approximately Rs 30 crore. The department also submitted that the investigation was still underway and, therefore, the petitioner should not be released on bail at that stage.

“The petitioner has been in judicial custody since 10.04.2026 and no complaint has been filed as on today.”

After examining the material available on record, the Court noted that the principal allegation against the petitioner was that he had facilitated another accused in availing ITC without any genuine business activity. The Court also observed that the alleged offences carried a maximum punishment of five years’ imprisonment and that the petitioner had already undergone substantial incarceration.

Taking into account the nature of the allegations, the period of custody undergone by the petitioner, and the fact that no complaint had yet been filed, the High Court found it appropriate to grant regular bail.

Thus, the Court directed the petitioner to furnish a personal bond of Rs.1 lakh along with two sureties of the like amount. The petitioner was also directed to appear before the investigating authorities every Monday and Friday for one month, whenever required, and was restrained from influencing witnesses. The Court further directed him to comply with the conditions prescribed under Section 483(2) of the Bharatiya Nagarik Suraksha Sanhita, 2023. Consequently, the criminal petition was allowed.

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