A Meerut court has remanded two accused, Gautam Sharma and Sachin Deewan to judicial custody until August 7, 2026, in connection with an alleged ₹31.57 crore fake Input Tax Credit (ITC) fraud under the Central Goods and Services Tax (CGST) Act, 2017. The prosecution alleges that the accused fraudulently availed ITC on the strength of fake invoices and bogus billing, resulting in substantial loss to the revenue.
According to the remand order passed by the Judicial Magistrate, Meerut, the Directorate General of GST Intelligence (DGGI), Ghaziabad Zonal Unit, produced the accused before the court after their arrest on July 26, 2026. The department sought judicial remand under Sections 132(1)(b), 132(1)(c), and 132(1)(i) of the CGST Act, 2017, contending that the investigation was still at a crucial stage.
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Alleged Fake ITC of Over ₹31.57 Crore
The prosecution alleged that the accused fraudulently claimed fake Input Tax Credit exceeding ₹31.57 crore by using forged tax invoices and fictitious transactions. The alleged offences fall within the penal provisions of the CGST Act dealing with fraudulent availment of ITC, issuance or use of fake invoices, and tax evasion. The DGGI informed the court that further investigation was necessary to uncover additional facts and identify other persons involved in the alleged fraud.
DGGI Cites Recovery of Digital Evidence
The investigating agency informed the court that during the search and investigation, it recovered mobile phones, laptops and other documents allegedly connected with the offence. These electronic devices were stated to contain digital evidence that required forensic examination. The prosecution argued that the investigation was continuing and additional material could emerge from the analysis of the seized devices.
Defence Challenges Arrest and Remand
Counsel appearing for the accused opposed the remand application, arguing that the arrest was illegal and that the accused had not been produced before the competent court within the prescribed period. The defence also contended that the prosecution had relied on incorrect facts and sought rejection of the remand application. It was further argued that the statutory safeguards governing arrest had not been properly followed.
Department Relies on Supreme Court Judgment
The prosecution relied upon the Supreme Court’s decision in National Building Construction Company Ltd. v. Union of India & Others (W.P.(C) No. 1144 of 2016) to submit that DGGI officers are empowered to investigate offences under the CGST Act. It also referred to CBIC Notification No. 14/2017-Central Tax dated July 1, 2017, which authorises DGGI officers to exercise powers under the Act. The department maintained that the arrest and investigation had been carried out in accordance with the statutory framework.
Court Finds Prima Facie Grounds for Judicial Custody
After considering the rival submissions, the court observed that the allegations involve fraudulent availment of ITC amounting to approximately ₹31.57 crore and that the investigation is still in progress. It noted that further evidence may emerge during the course of investigation and that the remand sought by the investigating agency was justified at this stage.
Accordingly, the court allowed the remand application and directed that the accused remain in judicial custody until August 7, 2026, with directions to produce them before the concerned court on the next date of hearing.
The department was represented by SPP Lakshay Kumar Singh.
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