A Meerut court has rejected the bail application of a Sandeep Singhal businessman accused of orchestrating a large-scale GST fraud involving the alleged fraudulent availment and utilization of Input Tax Credit (ITC) amounting to approximately ₹75.69 crore.
The case relates to offences punishable under Sections 132(1)(c) and 132(1)(i) of the Central Goods and Services Tax (CGST) Act, 2017.
The order was passed on February 23, 2026 by the Additional Sessions Judge, Court No. 01, Meerut, who observed that the allegations involve serious economic offences with significant implications for the national economy and public revenue.
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Allegations of Fraudulent ITC Through Multiple Firms
According to the prosecution, the Directorate General of GST Intelligence (DGGI), Meerut Zonal Unit, initiated an inquiry against three firms—M/s Balaji Enterprises, M/s Hanuman Enterprises (OPC) Pvt. Ltd., and M/s Tanya Enterprises—engaged in trading FMCG goods such as energy drinks and cigarettes.
Investigators alleged that the accused controlled and operated these firms and was responsible for managing their sale and purchase transactions. During the course of the investigation, authorities found that the firms had availed large amounts of ITC from several suppliers whose GST registrations had already been cancelled and who were later found to be non-existent upon physical verification.
The investigation revealed that: M/s Balaji Enterprises allegedly availed ITC of about ₹43.65 crore from cancelled taxpayers; M/s Hanuman Enterprises (OPC) Pvt. Ltd. allegedly availed ITC of about ₹27.58 crore from non-existent suppliers; and M/s Tanya Enterprises allegedly availed ITC of about ₹4.46 crore from similarly cancelled entities.
Sandeep Singhal
Authorities claimed that the cumulative fraudulent ITC claimed through these entities amounted to ₹75.69 crore, allegedly obtained without genuine supply of goods or valid tax invoices.
Evidence Recovered During Search and Investigation
Investigators also conducted searches at multiple premises, including an unregistered location in Pitampura, Delhi, where incriminating documents and digital devices such as mobile phones, a hard disk, and a laptop were recovered.
Forensic examination of the seized electronic devices reportedly revealed data suggesting involvement in fraudulent ITC transactions. According to the prosecution, chats recovered from the accused’s mobile phone indicated issuance and receipt of invoices without actual supply of goods or services.
Statements recorded during the investigation allegedly indicated that the accused was the key person handling financial transactions and business operations of the firms. Investigators also claimed that some firms were operated through employees acting as nominal proprietors.
Defence Raises Allegations of Procedural Violations
The defence argued that the accused had been falsely implicated and had been in judicial custody since January 14, 2026. It contended that the investigation by DGGI officers did not follow procedural safeguards prescribed under the Bharatiya Nagarik Suraksha Sanhita (BNSS), including provisions relating to recording of evidence on oath and search procedures.
The defence also alleged that the statements attributed to the accused were obtained under coercion and pressure. It further claimed that the panchnama was prepared on blank papers which were later filled by officers.
Additionally, the defence argued that the case was based primarily on documentary evidence and therefore did not justify continued custodial interrogation. Reliance was placed on several Supreme Court judgments emphasizing that “bail is the rule and jail is the exception.”
The accused also contended that business transactions were genuine, supported by invoices and bank records, and that the supplier firms were active at the time of transactions.
Department Opposes Bail
Lakshay Kumar Singh, SPP opposed the bail application, asserting that substantial documentary and electronic evidence established the accused’s role in the fraudulent ITC network. It denied allegations of coercion and maintained that the search and investigation were conducted in accordance with law.
According to the department, the case involves examination of voluminous records, electronic data, and multiple supplier and recipient entities across jurisdictions. Authorities argued that releasing the accused on bail could lead to tampering with evidence or influencing witnesses.
The prosecution further submitted that the accused had previously been arrested in September 2023 in another GST-related tax evasion case, indicating a pattern of similar conduct.
Court’s Observations
After examining the records and hearing both sides, the court noted that the investigation revealed prima facie evidence indicating fraudulent transactions involving invoices without actual supply of goods or services.
The court also observed that electronic evidence, witness statements, and financial records suggested that the accused played a central role in the alleged scheme. Additionally, the court took note of the prosecution’s claim that the accused had been involved in similar offences earlier.
Emphasizing the seriousness of economic offences, the court cited judicial precedents which state that such crimes are often committed with calculated intent and can cause substantial harm to the country’s economic system.
Bail Application Rejected
Considering the gravity of the allegations, the magnitude of the alleged tax evasion, and the possibility of tampering with evidence, the court held that it would not be appropriate to grant bail at this stage of the investigation.
Accordingly, the bail application was rejected, and the accused will continue to remain in judicial custody while the investigation proceeds.
Case Details
Case Title: Sandeep Singhal Versus UOI
Case No.: First Bail application No. 329 of 2026
Date: 23.02.2026
