The Court of the Special Chief Judicial Magistrate, Meerut, has remanded four accused to 14 days’ judicial custody in a major case involving fraudulent availment and passing of Input Tax Credit (ITC) under the Central Goods and Services Tax Act, 2017.
The case has been registered under Sections 132(1)(a), 132(1)(b) and 132(1)(i) of the CGST Act, 2017, which deal with offences relating to wrongful availment and utilisation of ITC without actual supply of goods.
According to the prosecution, the accused persons allegedly operated a well-organised network of shell trading firms to generate and pass on fake ITC by issuing invoices without actual movement or supply of goods, particularly in the pan masala and raw material trade.
The key accused, Shivam Dwivedi, proprietor and controller of M/s Kamadgiri Trading Co., is alleged to have facilitated fake ITC of approximately Rs. 71.56 crore by supplying raw materials on paper to firms such as M/s Gang Trading Co. and M/s Kamtanath Ji Traders, without issuing genuine bills or invoices.
Another accused, Dilip Kumar Jha, proprietor of Transport Co. Trading Co., is alleged to have fraudulently availed and passed on ITC amounting to Rs. 87.50 crore, again without actual supply of goods.
The court records further state that Sanjeet Kumar, associated with M/s Gang Trading Co., M/s Kamtanath Ji Traders and M/s Kamadgiri Trading Co., allegedly colluded with the main accused to pass on fake ITC of Rs. 28.75 crore.
Nitin Jain, plant in-charge of M/s Navrang Processing Industries LLP, is alleged to have facilitated fake transactions resulting in wrongful ITC of Rs. 11.09 crore by routing goods through paper transactions without genuine invoices.
During searches, investigators reportedly found a significant mismatch between physical stock and book records, indicating that the goods shown in invoices were either not available or were present in substantially lesser quantity.
The prosecution informed the court that if the illicit activity had not been detected in time, it could have resulted in loss of government revenue running into thousands of crores of rupees. So far, the investigation has allegedly uncovered illegal manufacture of pan masala worth nearly Rs. 5,000 crore, with fake ITC of around Rs. 250 crore already quantified.
Authorities also indicated that the figure may increase further as the investigation progresses and additional entities and individuals may be identified.
All four accused were arrested on February 1, 2026, following due compliance with arrest procedures. Grounds of arrest were provided to the accused in English, and arrest memos, seizure reports and panchnamas were duly prepared.
The defence argued that no GST theft had occurred and claimed procedural lapses, including non-supply of remand documents. Reliance was placed on judicial precedents including Senthil Kumar Antil v. State and Radhika Agarwal. The defence sought cancellation of remand.
However, after examining the case diary, prosecution submissions and documentary material, the court observed that the allegations involve serious economic offences and that custodial remand was justified at this stage.
The court held that specific amounts of fake ITC have been attributed to each accused. The offence involves large-scale economic fraud affecting public revenue. Investigation is still ongoing and may reveal further tax evasion
The court ordered that all four accused be sent to judicial custody for 14 days. They are to be produced before the court again on February 16, 2026.
