Bail Denied in Cross-State Fake GST ITC Racket Due to Gravity and Ongoing Probe | HC

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bail denied fake GST credit racket

Case Details: Bahadur Islam vs. Union of India - [2025] 181 taxmann.com 481 (Gauhati)

Judiciary and Counsel Details

  • Pranjal Das, J.
  • S.C. Biswas, B.D. Das & F.A. Hassan for the Petitioner.
  • S C Keyal, Ld. Standing Counsel for the Respondent.

Facts of the Case

The petitioner was arrested for his alleged involvement in GST fraud using fake registrations and invoices to pass on Rs. 8.59 crore bogus input tax credit. He was arrested under Section 132 of the CGST Act. The case diary and statements indicated the petitioner’s participation, receipt of illegal remuneration, evasive disclosure on bank accounts, and assistance in fraudulent registrations.

High Court Held

The High Court held that the safeguards for arrest were held applicable to GST arrests as well. Notices of grounds and authorisation were examined. Investigation materials, if accepted at face value, showed conscious participation and illegal benefit. The network appeared organised across states, and the probe remained active. Given gravity, ongoing investigation, and punishment up to five years, bail at this stage was declined.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied