Telangana High Court Allows Bail in Rs.21.89 Crore Fake ITC Prosecution After Completion of Investigation

Background of the Criminal Petition

The Telangana High Court considered a criminal petition filed under Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 by the petitioner, arrayed as Accused No.1. The petition sought regular bail in connection with FIR No. GEXCOM/AE/INV/GST/2502/2024-AE, registered by the Anti Evasion Wing of the Medchal GST Commissionerate, Hyderabad.

The FIR alleged commission of offences under Sections 132(1)(b), 132(1)(c), 132(1)(f) and 132(1)(l) read with Section 132(1)(i) of the Central Goods and Services Tax Act, 2017 (CGST Act). The core allegation was that the petitioner, along with other accused persons, had fraudulently availed fake Input Tax Credit (ITC) amounting to Rs.21.89 crores by relying on incorrect and non-genuine tax invoices.

The petitioner was apprehended on 28.01.2026 and was produced before the competent Court, where he was remanded to judicial custody on 29.01.2026.

Nature of the Allegations

According to the complaint and case records placed before the High Court:

  • The petitioner (Accused No.1) and co-accused allegedly:
    • Availed ITC of Rs.21.89 crores without actual receipt of goods or services.
    • Used fabricated or incorrect bills to claim such ITC.
    • Utilized the inadmissible ITC to discharge GST liability or pass on credit to others.

The offences invoked fall within the anti-evasion framework of the CGST Act dealing with fraudulent availment and utilization of ITC, use of bogus invoices, and related economic offences.

Statutory Provisions Cited

The FIR specifically referred to:

  • Section 132(1)(b) – relating to issuing invoices or bills without supply of goods or services, leading to wrongful ITC.
  • Section 132(1)(c) – covering availing of ITC using such wrongful invoices or bills.
  • Section 132(1)(f) – dealing with fraudulent availing of ITC without actual receipt of goods or services.
  • Section 132(1)(l) – relating to attempts or abetment in committing the above GST offences.
  • Read with Section 132(1)(i) – which prescribes enhanced punishment thresholds based on the quantum involved.

In parallel, the procedural aspects of arrest, production before Court and grant of bail are governed by the Bharatiya Nagarik Suraksha Sanhita, 2023, particularly Sections 480 and 483, which effectively replace earlier provisions of the Code of Criminal Procedure dealing with bail.

Submissions on Behalf of the Petitioner

Claim of Innocence and Challenge to Arrest

Counsel for the petitioner argued that Accused No.1 had been wrongly implicated and was not involved in any fraudulent GST activity. The key plank of the defence submissions was: