Gujarat High Court Grants Bail To Man Accused Of Fraudulently Availing Benefit Of Input Tax Credit Of Over ₹10 Crores

The Gujarat High Court granted bail to a man accused of fraudulently availing benefit of Input Tax Credit of over Rs.10 crores by allegedly showing fictitious transactions on record from companies whose GST registration came to be cancelled. The counsel for the GST authorities has opposed the application contending that the applicant herein initially created forged firms on the basis of the documents like Aadhar card, Pan card etc., and thereafter, had shown fictitious transactions with those firms.Based on this it was argued that the applicant had claimed Input Tax Credit worth more than Rs.10 crores and after the purpose was served, the registration of the firms created as above, was canceled.Petitioner's counsel argued that transactions were not fictitious and he had actually purchased goods from several firms. However, after the purchase of goods, due to some lapses on the part of those firms, their GST registration came to be canceled and the applicant had no role to play in this. Justice MR Megdey in his order said:"In the present offence, investigation is over and complaint has filed. It is the case of the prosecution against the applicant that he had claimed the benefit of Input Tax Credit by showing some fictitious transactions on record, though actually the applicant had not purchased any such goods from any of the firms in question. As per the case of prosecution, it was the present applicant himself who had created those firms and had obtained the benefit of Input Tax Credit. The offence alleged against the applicant is punishable with imprisonment up to 5 years. The applicant was arrested in connection with the present offence in the month of December 2024 and since then he is in custody. Having regard to these aspects, the present application deserves considerations and hence, the present application is hereby allowed".The court said that it has considered the facts, nature of allegations, as well as the alleged role of the applicant and had gone through the FIR and police papers . It further said that it had noted the earlier order passed by the Sessions Court rejecting the applicant's bail. The high court granted bail on him furnishing a a personal bond of Rs.10,000/- with one surety of the like amount, subject to certain conditions. It further clarified that the trial Court shall not be influenced by the prima-facie observations made by the high court in the bail order. Case title: SUNIL HIRALAL MANDOWARA Versus STATE OF GUJARAT & ANR.Counsel for petitioner: Advocate Apurva N MehtaCounsel for respondent 2: Advocate Utkarsh R SharmaClick Here To Read/Download Order Citation: 2025 LiveLaw (Guj) 131

Gujarat High Court Grants Bail To Man Accused Of Fraudulently Availing Benefit Of Input Tax Credit Of Over ₹10 Crores

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Gujarat High Court Grants Bail To Man Accused Of Fraudulently Availing Benefit Of Input Tax Credit Of Over ₹10 Crores

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