Bail Granted in Alleged Fake ITC Case due to Lack of Direct Evidence

Case Title: Praveen Kumar v. Directorate General of GST Intelligence
Court: High Court of Judicature at Allahabad
Petition No.: Criminal Misc. Bail Application No. 23980 of 2024
Neutral Citation: 2025:AHC:70050
Relevant Sections: Section 132(1)(b) & 132(1)(i), CGST Act, 2017; Section 439 CrPC (now Section 483 BNSS, 2023)
Category of Dispute: Bail in GST prosecution for fraudulent Input Tax Credit (ITC)
Date of Judgment: 28 April 2025

Facts of the Case

1. The Directorate General of GST Intelligence (DGGI), Meerut, filed a complaint against Praveen Kumar alleging creation of 232 fake firms used to pass on fraudulent ITC of approx. ₹1,048 crores [Para 2].

2. Search at his residence led to recovery of laptops, mobile phone, and documents. His statement under Section 70 CGST Act indicated that he, along with others, created firms and invoices [Para 2].

3. The applicant claimed false implication, stating he was only an accountant, while others allegedly involved were not made accused. He has been in custody since 12.01.2024 [Para 5].

4. Bail was earlier rejected by the Special CJM and District & Sessions Judge, Meerut [Para 3].

Questions in Consideration

1. Whether Praveen Kumar’s custody should continue despite no direct documentary evidence linking him with 232 fake firms [Para 7].

2. Whether reliance on his confessional statement under Section 70 CGST Act, without corroboration, was sufficient to deny bail [Para 7].

3. Whether prolonged custody without trial commencement was justified when the maximum punishment is 5 years [Para 8].

Observations of the Court

1. The prosecution’s case is primarily based on the applicant’s confessional statement; however, no documentary evidence was collected to connect him with 232 firms [Para 7].

2. The complaint does not contain details of 4,088 firms that received fake invoices, nor were bank accounts verified to prove operation by the applicant [Para 7].

3. The offences are triable by Magistrate, with a maximum punishment of 5 years; trial is yet to commence and could take considerable time [Para 8].

4. The applicant has already undergone over 15 months of custody; prosecution witnesses are official witnesses, hence no threat of tampering [Para 8].

Judgment of the Court

• The Court granted regular bail to Praveen Kumar subject to bail bond and surety to the satisfaction of the trial court [Para 9].

• The applicant must comply with all bail conditions imposed by the trial court [Para 9].

Between Fine Lines

• Bail was allowed as there was no direct documentary evidence linking the applicant to 232 fake firms.

• Reliance only on a confessional statement was deemed insufficient at this stage.

• Trial has not commenced despite over one year of custody.

• Maximum punishment is 5 years, hence further custody unjustified.

• Court stressed that the truthfulness of confession will be tested during trial.

Summary of Referred Cases

(No external cases were referred in this judgment; arguments revolved around evidence and statement under Section 70 CGST Act.)

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”