Bail Denied in Fake ITC Case Given Absconding Co-Accused and Gravity of Offence | HC

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Bail Denied in Fake ITC Case

Case Details: Mukesh Kumar vs. Additional Assistant Director, Directorate General of GST Intelligence, Coimbatore Zonal Unit, Coimbatore - [2025] 179 taxmann.com 606 (Madras)

Judiciary and Counsel Details

  • K. Rajasekar, J.
  • B. Kumar, Sr. Adv. & B. Sathish Sundar for the Petitioner.
  • P. Vishnu, Special Public Prosecutor for the Respondent.

Facts of the Case

The petitioner was alleged to have managed three dummy firms to avail and pass on ineligible input tax credit (ITC) without actual supply. Investigations showed the petitioner controlled invoices, e-way bills, and banking via a mobile app, availing ineligible ITC. The petitioner was arrested and applied for bail, while the prosecution highlighted that a co-accused was absconding and the investigation into multiple fake ITC claims was incomplete. The legal question was whether bail could be granted, given the seriousness of the offences and risk of evidence tampering, and the matter was placed before the High Court.

High Court Held

The High Court held that bail could not be granted. It emphasised that Section 132, read with Section 69, of the CGST Act applied to the petitioner’s conduct in managing dummy firms and facilitating fraudulent ITC claims. The Court observed that the petitioner’s management of invoices, e-way bills, and banking reflected a deliberate intent, and that an ongoing investigation could be compromised due to the absconding co-accused and the risk of evidence tampering. It dismissed the bail petition, emphasising the seriousness of the ITC fraud and potential impact on revenue recovery.

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