High Court Grants Regular Bail in Rs. 100 Crore GST Fake Billing Case

The applicants, Gaurav and Chandan Sharma, were arrested by the GST Intelligence Department (DGGI, Ghaziabad) for allegedly running a fake billing racket under the Goods and Services Tax (GST) system. The accused are claimed to be engaged in creating fake companies and issuing fake invoices without actually selling any goods, to claim ineligible Input Tax Credit (ITC) worth over Rs 100 crores (Rs 59 crore by Chandan and Rs 54 crore by Gaurav).

They were arrested after a search was conducted at a Ghaziabad hotel and at the residences of the accused applicant. The authorities found mobile phones, laptops, stamps, invoice books, and other suspicious materials. In a statement, Chandan Sharma admitted that he had claimed ITC fraudulently using ten fake entities. Similarly, as per allegations, Gaurav was also doing the same using twelve fake firms. Based on these statements and the investigation, both were charged under various sections of the Central GST Act.

Therefore, these two applicants applied for bail in two separate applications, but their plea was rejected by the Additional District and Sessions Judge, court no.4, Meerut. Therefore, they filed an application for bail to the Allahabad High Court.

Submission Made by Applicants’ Learned Council

The learned council of both the applicants contended that there is no solid proof that the accused was running a fake business, and the entire case is based on the confessions given in custody.

They also argued that some other people like Shiv Kumar, Satender Kasana, and Sushil Kumar were named in the investigation but not made accused. The learned council of applicant Gaurav stated that the investigation has been completed, but the trial is yet to commence.

They have filed applications under Section 483 Bhartiya Nagarik Suraksha Sanhita, 2023 for grant of regular bail.

Submission Made by Learned Counsel for Union of India

The learned council for the Union of India opposed this bail request and stated that the applicants are masterminds behind the scam. They created fake firms, made up invoices, and passed on fake ITC to other companies. He further submitted that the proofs gathered during the investigation also suggest that they have done this scam, and all the firms were later identified and found to be non-existent.

Allahabad HC Decision

The court, after hearing both sides, observed that the entire case is mainly based on custodial confessions. No proof was found that directly showed that the applicants were managing and running fake firms. The maximum punishment is 5 years, and the trial has not yet started; it could take a long time to finish.

Therefore, the High Court allowed the bail applications of both Gaurav and Chandan Sharma if they furnish bail bonds and comply with the conditions set by the trial court.