A Meerut special court has remanded the accused, Sageet Kumar and Shiv Divedi to judicial custody after investigators uncovered a complex network of bogus firms suspected of generating fraudulent Input Tax Credit (ITC) worth more than Rs. 5000 crore.
The order was passed by the Special Chief Judicial Magistrate Court, Meerut in connection with a case registered under multiple provisions of the GST law following an investigation by the Central Goods and Services Tax Department.
Allegations of a Large-Scale Fake Billing Network
According to the prosecution, the investigation centers on M/s Ganga Trading Co., identified as the primary firm allegedly orchestrating the fraudulent transactions. Authorities claim the firm issued invoices without actual supply of goods, enabling beneficiaries to claim illegal ITC and thereby causing substantial loss to the government exchequer.
Investigators told the court that the accused played a key role in creating and operating several shell entities that existed largely on paper. These firms were allegedly used to rotate invoices, inflate purchases, and disguise the absence of genuine business activity.
Officials further stated that the network extended beyond Meerut and had operational links in Delhi, indicating an inter-state fraud mechanism designed to evade detection.
Multiple Firms Under the Scanner
The probe has identified several business entities suspected of being part of the fake billing chain, including Kamalnathji Traders Co., Trimurti Impex, Mukund Trading LLP, and MK Traders.
Authorities believe these firms were either non-existent at their registered addresses or lacked the infrastructure required for the scale of trade reflected in their GST filings.
Evidence Suggests No Actual Movement of Goods
During the hearing, the department argued that transport records, e-way bills, and financial trails revealed significant discrepancies. Many consignments allegedly existed only on invoices, with no proof of physical delivery.
Statements gathered during the investigation suggested that certain firms merely issued bills for commission while routing funds through layered bank transactions to simulate legitimate trade.
Officials also pointed to digital records and seized documents indicating that large volumes of ITC were passed on to downstream entities without corresponding tax payments.
Arrest and Interrogation
The accused was arrested after investigators concluded that custodial interrogation was necessary to uncover the full extent of the fraud and identify other beneficiaries.
Authorities informed the court that the suspect failed to provide satisfactory explanations regarding the financial flows and business operations of the implicated firms. Investigators also expressed concern that releasing the accused could hamper the probe, given the possibility of evidence tampering or influencing witnesses.
Court Denies Relief
After reviewing the case diary and submissions from both sides, the court found sufficient prima facie material pointing to serious economic offences involving tax evasion.
Emphasizing the gravity of the alleged fraud and its potential impact on public revenue, the court rejected the plea for immediate relief and ordered 14 days of judicial custody.
Case Details
Case Title: UOI Versus Sangeet Kumar
Case No.: Bail Application No. 994/2026
Date: 12/02/2026
Counsel For Department: SPP Lakshay Kumar
