Pulkit v. State (NCT of Delhi), Delhi High Court, Bail Appln. 21/2022, decided on 12.04.2022 

Court: High Court of Delhi
Petition No.: Bail Appln. 21/2022
Category of Dispute: Fraudulent Input Tax Credit (GST), Economic Offences (Criminal)
Relevant Provisions: Sections 420, 468, 471 IPC; GST context—fraudulent ITC (period 27.08.2017 to 22.11.2017)
Date of Judgment: 12.04.2022
Source: Delhi High Court judgment (uploaded PDF)

Facts of the Case (Paras 1–7)

The FIR No. 263/2018, dated 24.12.2018, was registered at PS–EOW against Sanjay Garg, proprietor of M/s Saraswati Enterprises, for alleged fraudulent and unauthorised input tax credit claims under GST amounting to ₹9.97 crores (paras 1–2). The allegation was that a chain of fictitious entities was created to facilitate bogus invoicing and illicit ITC claims.

The applicant Pulkit was not originally named in the FIR; however, the chargesheet dated 08.10.2021 subsequently implicated him (para 3). It was alleged that he, along with co-accused Shubham Khandelwal, had created multiple shell firms using fabricated identities, opened bank accounts through fictitious credentials, and used mobile numbers and email addresses to operationalise the fraud.

The transactions under investigation pertained to the period 27.08.2017 to 22.11.2017, during which Saraswati Enterprises allegedly engaged in bogus billing and fraudulent ITC availment (para 4).

During investigation, the mobile number 9015824684—used in the registration and banking credentials of Saraswati—had been ported to the applicant’s name only on 13.03.2018, well after the period of alleged fraudulent activity (para 4). The alternative mobile number and other related numbers were historically subscribed in the name of co-accused Shubham Khandelwal (paras 4–5).

Similarly, the email ID “pulkitgoyal95@gmail.com,” relied upon by the prosecution to establish linkage, had been accessed by a third party (Umesh Sharma) for insurance purposes at the applicant’s request and was used to retrieve communications from Bandhan Bank relating to Saraswati’s account (para 5). The prosecution alleged that these identifiers connected the applicant to the fraudulent network of entities (para 7).

Questions / Issues Before the Court

1. Whether the applicant’s alleged role in the GST-linked fraudulent ITC scheme, based principally on his association with the mobile number and email credentials, warranted continued incarceration.

2. Whether the absence of prior criminal antecedents, the documentary nature of evidence, and the timeline mismatch of identifier ownership justified the grant of regular bail.

3. Whether the seriousness of the economic offence alone could justify denial of bail (para 9).

Court’s Observations (Paras 8–9)

The Court observed that the central basis for implicating the applicant was the use of mobile number 9015824684 and the email ID associated with him. However, the mobile number was transferred to his name only on 13.03.2018, while all alleged GST-related fraudulent transactions occurred during 2017 (para 8). Thus, the evidentiary linkage was weak and lacked contemporaneous correlation.

The Court noted that email access was also not directly by the applicant; rather, a neighbour accessed it at his request for unrelated insurance purposes, and historic emails were printed from the inbox (para 8).

There was no assertion that the applicant had any prior criminal antecedents or was a flight risk. The applicant had already been in custody for approximately nine months, and the evidence was predominantly documentary and already before the trial court (para 8).

Relying on Sanjay Chandra v. CBI (2012) 1 SCC 40, the Court reiterated that seriousness of the economic offence—though relevant—cannot by itself be a ground to deny bail, and pre-trial incarceration is not punitive in nature (para 9). The balance between personal liberty and societal interest must be maintained.

Judgment / Verdict (Paras 10–12)

The Court admitted the applicant to regular bail subject to conditions, including:

• Furnishing personal bond of ₹1,00,000 with two sureties, one being a blood relative (para 10(a));

• Residing at the address mentioned in the petition and notifying the IO of any change (para 10(b)-(c));

• Appearing before the trial court on all dates and keeping provided mobile numbers operational (para 10(d)-(e));

• Not tampering with evidence or influencing witnesses (para 10(f)).

The bail order expressly clarified that these findings shall not influence the merits of the trial (para 12).

Summary of Cases Referred (Tabular Form)

Between the Fine Lines (Practical Takeaways)

This judgment reaffirms that in GST-linked fraudulent ITC prosecutions, bail cannot be withheld solely on the gravity of the alleged tax loss. Where the evidentiary nexus is weak—especially when digital identifiers like mobile numbers or email accounts are linked to the accused only after the period of alleged tax fraud—continued custody becomes disproportionate. Courts will prioritise liberty where the investigation is complete, evidence is documentary, and risks of absconding or tampering are minimal.

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.”