Gujarat HC Grants Bail to Advocate in ITC Fraud Case Subject to Certain Conditions

The Gujarat High Court granted bail to an advocate in the case related to the availment and passing of bogus ITC without the actual movement of goods, subject to certain conditions.

The case registered by the DGGI Surat Zonal Unit for alleged offences punishable under Sections 132(1)(b) and 132(1)(c) of the GST law, which deal with fraudulent availment and passing of input tax credit. The applicant is an advocate, alleged to have filed GST returns for some companies, which do not exist in reality or are fake. During the hearing before the Gujarat High Court, the applicant argued that he had a limited role in the present case; hence, keeping him in jail for such a long period would be unfair and would serve no purpose. However, the prosecution opposed this applicant’s argument and claimed that the offence committed was serious and involved fraud.

When the court analysed the case, it noted that the applicant had admitted the fact that he was aware that the companies for which he had furnished GST returns were non-functional and did not exist in reality. They were merely created for the availment and passing of fraudulent input tax credit (ITC) without any actual movement of goods. However, the Court also observed that his role was limited, mainly related to compliance work and not the major beneficiary in the alleged fraud. The Court further noted that the investigation was complete and the chargesheet had already been filed.

The court cited an earlier ruling of the Supreme Court in the case titled Sanjay Chandra v. Central Bureau of Investigation (CBI), based on similar issue and held that this was a fit case for granting bail. In conclusion, the applicant has been granted bail subject to certain conditions such as furnishing a bond of Rs 50,000, not leaving Gujarat without permission, surrendering his passport, and marking monthly attendance at the police station for six months.