The Punjab and Haryana High Court has refused to grant anticipatory bail to Kuldeep Goyal, businessman accused of wrongfully availing Input Tax Credit (ITC) worth nearly ₹35 crore through alleged fake invoices and fictitious transactions under the GST regime.
The bench of Justice Manisha Batra has observed that economic offences involving fraudulent ITC claims have far-reaching implications on the financial health of the country and require thorough investigation.
The matter arose from a petition filed under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), seeking pre-arrest bail in connection with summons issued under Section 70 of the CGST Act read with Section 132 of the Central Goods and Services Tax Act, 2017.
Justice Manisha Batra, while dismissing the petition, held that the allegations involved wrongful availment of ITC through fictitious entities and fake invoices and that the petitioner had not cooperated with the investigation despite repeated summons.
According to the case records, raids were conducted at the premises of the petitioner’s firm, M/s Ansh Steel Alloys, concerning purchases made during assessment years 2019-20, 2020-21, and 2021-22. The GST authorities alleged that the firm had received invoices from cancelled firms and availed fraudulent ITC amounting to around ₹35 crore.
The Court noted that for assessment year 2019-20, the quantified amount was approximately ₹30.52 lakh and an appeal was pending before the appellate authority. Proceedings for assessment year 2020-21 had reportedly been dropped, while proceedings relating to assessment year 2021-22 had been stayed by the High Court in separate writ proceedings.
The petitioner argued that the fresh summons issued on March 11, 2026, were unjustified in light of the status of earlier proceedings. He further submitted that the matter was based entirely on documentary evidence, no recovery was pending from him, and therefore custodial interrogation was unnecessary. It was also contended that the maximum punishment under Section 132(1)(c) of the CGST Act was five years and that notice under Section 35(3) of BNSS had not been issued.
Reliance was placed on the Supreme Court’s decision in Radhika Aggarwal v. Union of India, wherein it was observed that anticipatory bail applications can be entertained even before registration of an FIR if there exists a reasonable apprehension of arrest.
However, the GST department opposed the plea and alleged that the petitioner’s firm had generated fake invoices unsupported by actual supply of goods or services and had facilitated wrongful availment and passing of ITC. The department further alleged that the petitioner had persistently avoided investigation, failed to comply with repeated summons issued under Section 70 of the CGST Act, and had deliberately withheld documents and records required for inquiry.
The authorities also informed the Court that a search operation conducted on March 11, 2026, resulted in seizure of technical devices for examining the genuineness of transactions and identifying the network of fictitious entities allegedly involved in the fraudulent ITC scheme.
While considering the rival submissions, the High Court examined the scope of Sections 69 and 70 of the CGST Act. The Court observed that Section 69 empowers the Commissioner to authorize arrest where there is reason to believe that offences specified under Section 132 have been committed, while Section 70 empowers GST officers to summon persons for evidence and production of documents during inquiry.
The Court referred to the Supreme Court’s observations in Radhika Aggarwal and clarified that although anticipatory bail petitions are maintainable even at the summons stage in appropriate cases, such relief depends upon existence of concrete grounds and exceptional circumstances.
The High Court also relied upon earlier judicial precedents including Hira Gobind Bhatia v. State of CGST, where courts had emphasized that GST frauds involving fake ITC are grave economic offences affecting national interest and financial stability.
After examining the facts, the Court concluded that the allegations involved wrongful availment of huge amounts of ITC through fictitious transactions and that the investigation was still at a nascent stage. The Court observed that the petitioner had failed to cooperate with the inquiry and had not appeared before GST authorities pursuant to summons issued under Section 70.
The Court further held that custodial interrogation was necessary for effective investigation and to unearth the alleged fraud in all its facets. It warned that grant of anticipatory bail at this stage could enable tampering with evidence or manipulation of records.
The High Court dismissed the anticipatory bail petition while clarifying that the observations made in the order were limited to adjudication of the bail plea and would not affect the merits of the main proceedings.
Case Details
Case Title: Kuldeep Goyal Versus Joint Commissioner Preventive Central Goods and Services Tax and another
Case No.: CRM-M-18281-2026 (O&M)
Date: 28.04.2026
Counsel For Petitioner: Bipan Ghai, Senior Advocate
Counsel For Respondent: Naman Jain, Senior Standing Counsel
