Bail Granted to Accused in Fake ITC Case on Ground of Parity

Case Title: Ankit Rajput v. Union of India & Mayank Rajput v. Union of India
Court: High Court of Judicature at Allahabad
Petition Number: Criminal Misc. Bail Application Nos. 46743 & 47009 of 2024
Neutral Citation: 2025:AHC:56407
Category of Dispute: Input Tax Credit – Fraudulent Availment
Date of Judgment: 17.04.2025
Relevant Sections:

• Section 132(1)(b), 132(1)(c), 132(1)(i), Section 70 – CGST Act, 2017

• Section 74 – CGST Act (assessment & recovery, referred)

• Section 483 – BNSS, 2023 (Bail provision)

Facts of the Case (Paras 2–9)

• Applicants Ankit Rajput and Mayank Rajput were arrested on 25.10.2024 by DGGI, Ghaziabad for creating 17 fake firms and availing/passing on fraudulent ITC.

• Investigation revealed misuse of IDs and documents of multiple persons to generate fictitious firms (M/s Shiv Wire Udhog, MG Wire Udyog, Swastik Wire Industry, etc.).

• Statements under Section 70 CGST Act were recorded wherein applicants admitted to operating such firms in partnership with one Vikrant Singhal.

• Fake ITC availed and passed:

  • Ankit Rajput: ITC availed – ₹9.41 Cr; ITC passed – ₹8.21 Cr.

  • Mayank Rajput: ITC availed – ₹15.70 Cr; ITC passed – ₹14.97 Cr.

• Co-accused Shivam Goyal and Vikrant Singhal were already granted bail earlier (Feb & Mar 2025).

Questions in Consideration (Paras 10–12)

1. Whether the applicants, alleged masterminds of fraudulent ITC racket, deserve bail considering the gravity of the offence?

2. Whether parity with co-accused (already granted bail) can be extended to them?

3. Whether further detention of the accused serves any purpose when investigation is complete and trial is yet to commence?

Observations of Court (Paras 13–17)

• Entire case rests on documentary evidence; investigation is already complete.

• Complaints against co-accused arise out of the same set of transactions; co-accused already on bail.

• Confessions recorded under Section 70 CGST Act—admissibility to be tested during trial.

• Offences are triable by Magistrate with maximum punishment of 5 years.

• Applicants already spent over six months in custody; trial not commenced; witnesses are official witnesses, unlikely to be influenced.

• Detention would serve no further useful purpose.

Judgment of Court (Paras 18–20)

• Bail applications allowed.

• Applicants Ankit Rajput and Mayank Rajput ordered to be released on regular bail upon furnishing bonds/sureties as directed by trial court.

• They must abide by bail conditions imposed by trial court.

Order Date: 17.04.2025

Between Fine Lines (Simplified Outcome)

• The Court granted bail to Ankit and Mayank Rajput accused of creating fake firms and availing fraudulent ITC worth over ₹40 crores.

• Since co-accused in the same racket were already granted bail, the Court extended parity.

• Investigation was complete, and trial yet to start; prolonged custody deemed unnecessary.

• Maximum punishment being 5 years, bail was found justified.

• Confessions and evidence will be tested only during trial.

Summary of Referred Cases

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