The Gujarat High Court has granted regular bail to an advocate accused of filing GST returns for allegedly non-existent firms that were created to fraudulently avail and pass on input tax credit (ITC).
The bench of Justice Nikhil S. Kariel observed that while the allegations were serious, the material on record indicated that the applicant’s role appeared limited to compliance activities and he did not seem to be a major player in the alleged fraud.
The case arose from an investigation conducted by the DGGI regarding alleged fraudulent availment and passing of input tax credit without actual supply of goods. The applicant was accused of assisting in the filing of GST returns for several companies that were allegedly fictitious entities created solely to facilitate fraudulent ITC transactions.
The prosecution alleged offences under Sections 132(1)(b) and 132(1)(c) of the Central and Gujarat Goods and Services Tax Acts, which deal with fraudulent availment or utilization of ITC and issuance of invoices without actual supply of goods or services.
The applicant approached the High Court seeking regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023.
Counsel appearing for the applicant argued that the allegations primarily related to filing GST returns and compliance-related work. It was submitted that continued detention would serve no useful purpose and that the applicant was willing to abide by any conditions imposed by the Court if released on bail.
On the other hand, the State strongly opposed the bail plea. The prosecution contended that the nature of the alleged offence involved serious tax fraud and that the role attributed to the applicant warranted denial of bail.
After hearing the parties and examining the record, the High Court considered several key factors.
The Court noted that the applicant is an advocate and that the allegations suggested he had filed returns for companies that were allegedly non-existent. It also took note of a statement given by the applicant under Section 70 of the GST Act, in which he admitted awareness that some of the firms were non-functional entities created for the purpose of fraudulent ITC transactions.
However, the Court also observed that the investigation had been completed and the complaint (charge-sheet) had already been filed. The role attributed to the applicant appeared to be limited to compliance work. The financial benefit allegedly received by him was only slightly higher than what a consultant might ordinarily charge. There was no prima facie indication that the applicant was part of the larger conspiracy or a major participant in the alleged fraud.
The Court also relied on principles laid down by the Supreme Court regarding bail jurisprudence, emphasizing that prolonged incarceration should not be continued once the investigation is complete unless necessary.
The High Court held that it was a fit case to exercise judicial discretion in favour of granting bail.
The Court ordered the applicant’s release on bail upon furnishing a bond of ₹50,000 with one surety of the like amount. The bail was made subject to several conditions, including not misusing the liberty granted by the Court; not acting in any manner prejudicial to the prosecution; surrendering his passport within one week; not leaving the State of Gujarat without prior permission of the Sessions Court; informing the investigating officer and the Court about his residential address and not changing it without prior intimation; and marking presence once a month at the concerned police station for six months.
The Court further clarified that the observations made in the bail order were only preliminary and should not influence the trial court during the course of the trial.
Case Details
Case Title: Rohitkumar Parsotambhai Sanghani Versus State Of Gujarat & Anr.
Case No.: R/Criminal Misc.Application (For Regular Bail – Before Chargesheet) No. 2111 Of 2026
Date: 03/03/3036
Counsel For Petitioner: APURVA N MEHTA
Counsel For Respondent: UTKARSH R SHARMA
