The Allahabad High Court has granted bail to a man accused in a case involving an alleged ₹80 lakh Goods and Services Tax (GST) input tax credit claim, taking into account the prima facie position that he received ₹20,000 a month to operate a business in his name while other co-accused actually ran the firm.

The bench of Justice Avnish Saxena allowed the bail application and clarified that it was granting bail without entering into the merits of the criminal case.

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The order came on the accused’s application for release during the pendency of trial in Case Crime No. 389 of 2025, registered at Jalesar police station in Uttar Pradesh’s Etah district. The case invoked Sections 318(3), 316(5), 336(3), 340(2), 61(2), 338 and 318(4) of the Bharatiya Nyaya Sanhita (BNS).

The applicant contented GST officials lodged the FIR, against the accused in his capacity as proprietor of M/s Nidhi Enterprises. The prosecution case concerned an input tax credit claim of approximately ₹80 lakh.

The defence argued that the accused who made artificial jewellery and worked as a labourer, had been made a scapegoat. His counsel alleged that three GST officials, identified in the order as Sushil, Prashant Kumari and Dushyant, along with chartered accountant Sonu Kushwaha, approached him to incorporate a company and paid him ₹20,000 a month.

The applicant’s case was that the records had been manipulated and that the business was actually operated by the officials and the chartered accountant. He denied having any substantive role in the alleged wrongdoing.

These assertions were submissions made by the defence at the bail hearing. The order does not finally determine the alleged involvement of the officials or the chartered accountant.

To support the contention that others controlled the business, the applicant’s counsel referred to page 83 of the case diary, submitting that the firm’s email address belonged to chartered accountant Sonu Kushwaha.

Counsel also drew the Court’s attention to a separate FIR in Case Crime No. 453 of 2025, registered at Kotwali police station in Etah against the three GST officials. According to the defence submission recorded in the order, that FIR had been lodged by an official of the GST department.

The defence relied on these circumstances to argue that the accused was merely used to establish the firm for a monthly payment and that no incriminating material demonstrated his complicity in the present case.

The applicant informed the Court that the charge sheet had been submitted, but the trial was still to commence. The accused had been in custody since May 13, 2026.

The defence also addressed his criminal history. As recorded in the order, counsel stated that the accused had a history of seven cases, including five GST cases. Counsel submitted that he was on bail in five cases, had been acquitted in one and had been released on notice in another.

The State’s Additional Government Advocate opposed the bail application. The order records the opposition without setting out detailed arguments advanced by the prosecution.

The Court held that the accused was entitled to bail in view of the prima facie circumstances concerning his role in M/s Nidhi Enterprises.

The decisive consideration was that he received ₹20,000 a month for running the business under the firm’s banner, while the business was actually run by other co-accused.

The Court’s reasoning therefore focused on the applicant’s apparent role and the control exercised by others over the business. It did not adjudicate the validity of the disputed input tax credit claim or determine criminal responsibility for the alleged transactions. 

The Court directed accused’s release on furnishing a personal bond and two sureties, each in the like amount, to the satisfaction of the court concerned.

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