The Delhi High Court has dismissed an application for anticipatory bail in a cyber-fraud investigation concerning the alleged creation and use of fake GST registrations by misusing the PAN Card and other credentials of innocent persons. The Court considered the allegations to have serious consequences both for persons whose identity documents were allegedly misused and for the economy.
Background of the Case
The case originated from a complaint by a woman who stated that she received an Income Tax Department notice on 9 April 2024 and subsequently discovered that two GST firms had been linked to her PAN Card. According to the complaint, she had neither applied for GST registration nor had any knowledge of the businesses purportedly being carried on through those registrations.
During investigation, the police visited the stated business premises of the entities but allegedly found that no such firms existed there. The investigating agency thereafter carried out a technical investigation relating to mobile numbers, OTPs used for filing GST returns, bank accounts, email IDs and IP addresses.
Allegations Against the Applicant
According to the prosecution, the technical investigation allegedly connected mobile numbers and email IDs used in the transactions with the applicant, Raj Kumar. It was alleged that he was involved in generating GST numbers of fake entities and supplying such GST numbers, together with associated mobile numbers and email IDs, to a co-accused.
The prosecution further alleged that fake invoices and e-way bills were generated using those GST numbers and were sent to clients, who allegedly made payments directly to the applicant.
The applicant disputed the allegations and argued that the case against him was substantially based on the disclosure statement of a co-accused. It was also contended that the allegedly incriminating mobile phones did not belong to him and that he was neither involved in nor a beneficiary of the alleged fraud.
Delhi High Court’s Findings
Justice Girish Kathpalia noted the detailed technical investigation undertaken by the Investigating Officer and specifically appreciated the use of information-technology tools to trace the persons allegedly involved in the fraud.
The Court observed that the investigation against the applicant was still continuing and was intended to determine the wider extent of the alleged fraud.
The High Court emphasised the seriousness of allegations involving the filing of fake GST returns through the misuse of PAN Cards and other credentials belonging to innocent members of the public. According to the Court, such conduct may have grave consequences not only for the affected individuals but also for the economy.
The Court further noted that the applicant had allegedly not been joining the investigation and held that, considering the nature and complexity of the investigation, the Investigating Officer’s requirement for custodial interrogation could not be regarded as unjustified.
The judgment also records that the applicant was stated to be involved in three other FIRs concerning financial fraud, including one case under the Prevention of Money Laundering Act.
Anticipatory Bail Rejected
Considering the seriousness of the allegations, the continuing technical investigation, the stated requirement for custodial interrogation and the applicant’s alleged involvement in other financial-fraud cases, the Delhi High Court held that the matter was not fit for grant of anticipatory bail.
Accordingly, BAIL APPLN. 1632/2026 was dismissed.
Key Takeaway
The judgment demonstrates the stringent approach that may be adopted at the anticipatory-bail stage where allegations concern organised cyber fraud involving fake GST registrations, misuse of identity credentials, fake GST returns, invoices and e-way bills. The Court also treated the need for continuing technical investigation and custodial interrogation as material considerations while refusing anticipatory bail.