Bail Granted in Fake ITC Fraud Case: Chhattisgarh High Court Rules Custodial Interrogation No Longer Necessary

Case Overview

Case: Santosh Wadhwani Vs Directorate General of Goods And Service Tax (Chhattisgarh High Court)

Provision Invoked: Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) read with Section 132(1)(c) of the Central Goods and Services Tax Act, 2017

Crime Reference: Crime No. 158/GST/2025-2026, Police Station DGGI, RZU, Raipur, District Raipur (C.G.)

Background of the Case

The Chhattisgarh High Court recently adjudicated a bail application filed by the applicant, Santosh Wadhwani, who had been taken into custody in connection with an alleged large-scale Input Tax Credit (ITC) fraud. The applicant was arrested on 29.01.2026 and had sought regular bail after his earlier application under Section 480 of the Bharatiya Nagarik Suraksha Sanhita, 2023 was dismissed by the learned Chief Judicial Magistrate on 04.02.2026.

The matter centered around allegations that the applicant had fraudulently availed ITC worth ₹11,44,00,000/- (Rupees Eleven Crores Forty Four Lakhs) by routing transactions through four firms — M/s. Aksha Trading, M/s. M.K. Enterprises, M/s. Dishankar Trading, and M/s. Giridhar Gopal Impex Pvt. Ltd. — none of which were found to be carrying out actual business operations or executing any physical supply of goods in Raipur.

The applicant was alleged to be in overall control of the proprietary concern M/s. Vijay Laxmi Trade Company and was identified by the prosecution as the primary orchestrator and ultimate beneficiary of the fraudulent ITC availing scheme.

Prosecution's Case: Key Allegations

The Directorate General of GST Intelligence (DGGI) presented a detailed case against the applicant, broadly structured around the following allegations: