Telangana High Court Grants Bail to Accused in Rs. 21.89 Crore Fake Input Tax Credit Case

Case Overview

Case Name: Pavan Madanlal Vs Superintendent of Central GST
Court: Telangana High Court
Statute Invoked: Section 132(1)(b), (c), (f), and (l) read with Section 132(1)(i) of the Central Goods and Services Tax Act, 2017
Bail Petition Filed Under: Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023
FIR Reference: GEXCOM/AE/INV/GST/2502/2024-AE

Background of the Case

The Telangana High Court was approached by Accused No. 1 — the petitioner — through a criminal petition filed under Sections 480 and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), seeking regular bail. The FIR in question was registered by the Anti Evasion Wing, Medchal GST Commissionerate, Hyderabad, and pertained to alleged violations under Sections 132(1)(b), (c), (f), and (l) read with Section 132(1)(i) of the Central Goods and Services Tax Act, 2017.

The core allegation against the petitioner and his co-accused was that they had fraudulently availed fake Input Tax Credit (ITC) amounting to Rs. 21.89 crores by routing transactions through fabricated and incorrect invoices. The petitioner was placed under arrest on 28.01.2026 and was subsequently remanded to judicial custody on 29.01.2026.

Arguments Advanced by the Petitioner

The learned counsel appearing on behalf of the petitioner raised several substantive grounds in support of the bail application:

  • The petitioner was stated to be innocent of the charges levelled against him.
  • It was contended that the offences alleged in the FIR were bailable and cognizable in nature, making the arrest and continued detention legally questionable.
  • It was highlighted that Accused No. 3 in the same matter had already been granted bail by the concerned trial court, thereby creating a parity argument in favour of the petitioner.
  • A significant submission was that the material portion of the investigation had already been completed, rendering further custodial interrogation of the petitioner wholly unnecessary.
  • On the basis of these grounds, the petitioner sought enlargement on regular bail.

Contentions Raised by the Respondent — CBIC

The Senior Standing Counsel appearing for the Central Board of Indirect Taxes and Customs (CBIC) on behalf of the respondent strongly opposed the bail application on the following grounds: