A Meerut court has rejected the bail to Nitin Aggarwal, who was arrested by the Directorate General of GST Intelligence (DGGI), Ghaziabad, in connection with an alleged ₹60.57 crore fake Input Tax Credit (ITC) fraud under the Central Goods and Services Tax (CGST) Act, 2017. The case pertains to the alleged generation and circulation of fake invoices through multiple entities to fraudulently avail and pass on ITC.

The Additional Sessions Judge noted that Nitin Aggarwal did not get the firms registered in his own name because his credit score was not good due to legal procedures raised by the income tax department and there were difficulties in attaining the loans, hence he got the name of his son Garvit Aggarwal registered in the affairs of the firm. To utilise the cash amount towards payment were done without invoices. 

DGGI Investigation and Allegations

According to the prosecution, intelligence inputs received by the DGGI suggested that a network of shell firms was involved in issuing fake invoices without actual supply of goods, enabling the fraudulent availment and transfer of input tax credit.

Based on these inputs, DGGI officers conducted search operations on January 29, 2026, at the residential premises of Nitin Aggarwal as well as the registered premises of firms allegedly linked to him, including M/s NTEXX Textiles Pvt. Ltd., M/s Shri Balaji Sales, and M/s Shri Ram Sales Corporation.

During the course of the investigation, officials allegedly recovered documents, electronic devices, and other records believed to be connected with the fraudulent transactions.

The prosecution alleged that Aggarwal had availed and passed on fraudulent ITC obtained from around 87 suspicious or non-existent firms, resulting in a total alleged tax fraud amounting to ₹60,57,35,927.

Key Statement by the Accused

A significant part of the prosecution’s case revolves around the statement recorded from Nitin Aggarwal under Section 70 of the CGST Act.

In the statement, Aggarwal reportedly stated that he did not register the firms in his own name because his credit score had deteriorated due to legal proceedings initiated by the Income Tax Department. As a result, he faced difficulties in obtaining loans from financial institutions.

According to the statement, because of these financial and legal constraints, he got the firm registered in the name of his son, Garvit Aggarwal, who was shown as being involved in the affairs of the business.

The statement also allegedly indicated that cash transactions were carried out without invoices, and such cash amounts were utilised for payments in connection with the operations of the firms.

Investigators relied on this statement to argue that Aggarwal exercised actual control over the firms and their financial dealings, despite not formally appearing as a director or proprietor in official records.

Defence Arguments

Counsel for the accused strongly contested the allegations and argued that the case against Aggarwal was based primarily on statements recorded during investigation, which were later retracted.

The defence contended that the accused was not officially associated with the firms as a director, proprietor, or authorised signatory. No documentary evidence, such as signed invoices or financial records, directly linked him to the alleged fraudulent transactions. The statement relied upon by the prosecution was recorded late at night without legal assistance, raising questions about its voluntariness. The accused subsequently retracted the statement, alleging it had been obtained under coercion.

The defence also argued that the arrest procedure was irregular, claiming that Aggarwal was kept in the constructive custody of DGGI officials prior to his formal arrest, and was produced before the magistrate after a delay.

Court’s Consideration

After hearing arguments from both sides and examining the available records, the Additional Sessions Judge considered the circumstances of the arrest, the nature of the evidence, and the role attributed to the accused.

Taking these factors into account, the court rejected the bail application, granting relief to Aggarwal subject to conditions.

Case Details

Case Title: Nitin Aggarwal Versus UOI

Case No.: First Bail application No. 514 of 2026

Date: 27/02/2026

Counsel For Respondent: SPP Lakshay Kumar Singh

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