Bail Granted in GST Fake ITC Fraud Case — Punjab & Haryana High Court

Case Overview: Kamalpreet Singh Vs State (Directorate General of GST Intelligence)

The Punjab and Haryana High Court, in CRM-M-73660-2025, granted regular bail to an individual prosecuted under Section 132(1)(b) and Section 132(1)(c) read with Section 132(5) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017), along with Section 20(XV) of the Integrated Goods and Services Tax Act, 2017 (IGST Act, 2017). The petition was filed before the High Court after the Additional Sessions Judge, Panchkula had earlier dismissed the bail application of the accused.

This case presents a critical intersection of GST enforcement, personal liberty, and the evidentiary standards applicable at the pre-trial stage in matters involving large-scale alleged Input Tax Credit (ITC) fraud.

Background and Factual Matrix

Raid, Seizure, and Arrest

On 11.09.2025, between approximately 7:20 PM and 10:20 PM, the Directorate General of GST Intelligence (DGGI) conducted a search and inspection operation under Section 67(1) of the CGST Act, 2017. The premises searched included the residential address of the accused as well as the registered offices of nine firms allegedly being operated by him.

During the course of the search operation, the investigating agency recovered a substantial array of materials, including:

  • Two mobile phones (VIVO Y28 5G and VIVO Y29 5G)
  • One HP Laptop
  • A Hard Disk Drive (HDD)
  • Multiple pen drives (16GB SanDisk, 28GB SanDisk, 32GB Toshiba)
  • Notepads and miscellaneous papers
  • Cheque books belonging to Kotak Mahindra Bank, HDFC Bank, Karur Vysya Bank (Fateh Enterprises), and Kotak Mahindra Bank (J R Iron Impex)
  • Bank passbooks of Indian Bank and Canara Bank in the accused's name
  • RTGS/NEFT application forms
  • A rubber stamp of J R Iron Impex

These items were reportedly recovered from the possession of the accused's mother, who was present at the residential premises during the search.

The investigating agency alleged that through these nine firms (later expanded to eleven fictitious firms in subsequent proceedings), the accused had:

  • Fraudulently availed ineligible ITC amounting to ₹71.35 crore
  • Passed on ineligible ITC to the tune of ₹72.77 crore

The accused was arrested on 11.09.2025 and subsequently approached the Court of the Additional Sessions Judge, Panchkula for bail. That application was rejected vide order dated 04.12.2025, following which the present petition was filed before the Punjab and Haryana High Court.

Arguments Advanced by the Accused

Defence: Role Limited to That of an Accountant

The counsel representing the accused strongly disputed the prosecution's characterisation of his client as the mastermind of a fake ITC racket. The key submissions advanced on behalf of the accused were as follows:

  • The accused had no proprietary or beneficial ownership in any of the firms in question. He was engaged purely in an accounting or consultancy capacity.
  • His role was restricted to filing GST returns and maintaining accounts in accordance with instructions provided by the actual operators of the firms.
  • He held no position as a director, partner, or shareholder in any of the entities involved.
  • He claimed to have derived no personal monetary benefit from the alleged transactions.
  • The accused had been working as an accountant for certain individuals — namely Mukesh Kumar @ Max, Jagtar Ram, and Praveen Goel — who were described as the actual partners and original conspirators. Jagtar Ram was reportedly the complainant, and the primary target of the complaint was Praveen Goel and Mukesh Kumar @ Max.