Fake Billing Racket Passing ITC Worth Rs. 280 Crores: Delhi High Court Refuses DGGI’s Bail Cancellation Plea

The Delhi high Court has refused the bail cancellation plea of Directorate General of GST Intelligence (DGGI) of the alleged mastermind of fake billing racket passing fake Input Tax Credit (ITC) worth Rs. 280 crores.

The bench of Justice Sanjeev Narula has observed that the investigation is now complete, and the Petitioner department is on the verge of filing a prosecution complaint. DGGI with permission from the CJM, Patiala House Courts, recorded the Respondent’s statement while he was in judicial custody. Therefore, as such, there is no requirement to direct the detention of the Respondent.

The Respondent/accused, Yogesh Kumar Gupta is allegedly the mastermind of a fraudulent billing racket, operating through 16 firms/ companies, engaged in the practice of issuing GST invoices without the actual supply of goods or services. This operation is executed in a planned and systematic manner, with an intent to defraud the government exchequer. The Respondent has also been playing an active role in passing fraudulent ITC.

At the time of the Respondent’s arrest, the total amount of fraudulent ITC generated and passed by him was INR 86.37 crores. However, further investigation and analysis of the evidence gathered determined that the actual quantum of fraudulent ITC passed by the Respondent was approximately INR 280 crores, with the possibility of this amount increasing further.

The accused 1st bail application was rejected by the CJM, Patiala House Courts by his order dated 24.2.2025. Immediately 2 days thereafter, the respondent/accused filed a successive bail application on 27.2.2025 and which was allowed by the same CJM vide his order dated 3.3.2025. The DGGI challenged the bail order directly before the High Court of Delhi.

Harpreet Singh, Senior Standing Counsel for the DGGI, contends that the Respondent was granted bail in an arbitrary manner and in undue haste, without adequately considering the contentions and submissions made by the Petitioner before the CJM. He argues that while the Respondent has the right to file successive applications for bail, the second application did not present any new grounds that would warrant a different opinion by the CJM.

Mohit Mathur, Senior Counsel for the DGGI, on the other hand, controverts the contentions urged by DGGI. He submits that the second bail application was indeed maintainable, as the proceedings concerning the first bail application were effectively concluded on 15th February, 2025, when the Magistrate reserved the order. Consequently, he argues that the change in circumstances should be assessed from the date the arguments were concluded on the first bail application, i.e., 15th February 2025, and not from the date of pronouncement of the first bail order, i.e., 24th February, 2025, as suggested by the Petitioner.

The court held that the observations of the CJM in his bail grant order were incorrect and has set aside the same. The High Court has held that there was no change in circumstances which would warrant interference.

However, on the issue of re-arrest of the respondent/accused, the High Court observed that since sufficient time had elapsed since the bail was granted, the Court did not order re-arrest.

Case Details

Case Title: DGGI Versus Yogesh Kumar Gupta

Case No.: CRL.M.C. 1573/2025 & CRL.M.A. 7109/2025

Date: 27.03.2025

Counsel For Petitioner: Mr. Harpreet Singh, Sr. SC with Ms. Suhani Mathur, Mr. Jai Ahuja and Mr. Akshay Saxena, Advocates.

Counsel For Respondent: Mr. Mohit Mathur, Senior Advocate with Mr. Manish Pratap Singh and Mr. Ajay Singh, Advocates.

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