The Gujarat High Court has granted regular bail to a director accused in an alleged ₹63.21 crore fake Input Tax Credit (ITC) fraud, observing that further incarceration was not necessary after the completion of the investigation and filing of the complaint. 

The bench of Justice Ilesh J. Vora has noted that the prosecution case primarily rests on documentary evidence, the accused had remained in custody since April 2026, and the maximum punishment prescribed under the relevant provisions of the Central Goods and Services Tax (CGST) Act is five years. 

The case arose from a complaint filed by the Directorate General of GST Intelligence (DGGI), Ahmedabad Zonal Unit, alleging that M/s WLTPE (M/s Yoke Payment India Private Limited) and its directors were involved in a large-scale GST fraud. According to the prosecution, the company, which was engaged in providing e-top-up services and held GST registration under the relevant HSN classification, had issued fake invoices without any actual supply of services. 

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The complaint alleged that the company and its directors orchestrated a systematic scheme to pass on fraudulent Input Tax Credit to 18 beneficiary companies through bogus invoices.

During the investigation, the DGGI conducted searches and recorded statements of the applicant and other persons under summons.

According to the department, the investigation revealed that fake invoices amounting to a taxable value of ₹351.19 crore, involving fraudulent ITC of ₹63.21 crore, had been issued without any underlying supply of e-top-up services. The prosecution alleged that the applicant played a key role in organising the tax evasion scheme, causing substantial loss to government revenue and attracting offences under the CGST Act and other applicable provisions. 

Senior Advocate G.M. Joshi, appearing for the applicant, argued that the accused had been in judicial custody since April 2026.

It was submitted that the investigating agency had already seized substantial cash, electronic gadgets, computers, and the company’s electronic ledger. Since the investigation had concluded and the complaint had already been filed before the competent court, continued detention would serve no useful purpose. The defence further contended that the trial was unlikely to conclude in the near future, making prolonged incarceration unjustified. 

The prosecution opposed the bail plea, contending that there existed a strong prima facie case against the accused.

It argued that the alleged offence constituted a serious economic crime involving large-scale tax evasion and that the applicant was one of the masterminds behind the fraudulent transactions. Considering the gravity of the allegations and the larger public interest, the department urged the High Court not to exercise its discretion in favour of the accused. 

The bench observed that the investigation had substantially concluded and the department had already secured the relevant financial evidence, electronic devices, and the company’s e-ledger.

The Court further noted that the applicant had remained in custody since April 2026. The criminal complaint had already been filed. The prosecution case was primarily based on documentary evidence. There appeared to be little likelihood of an early conclusion of the criminal trial. The maximum punishment prescribed for the alleged offences is five years.

The Court held that continued detention was not warranted and that the applicant was entitled to be released on regular bail. 

The High Court directed the release of the applicant on furnishing a personal bond of ₹1 lakh along with one surety of the like amount before the trial court.

The bail was made subject to several conditions, including The applicant shall not misuse the liberty granted. He shall not act in any manner prejudicial to the prosecution. He must surrender his passport within one week, if any. He shall not leave India without prior permission of the Sessions Judge. He must furnish his latest residential address and cannot change it without prior permission of the trial court. He shall cooperate with the trial and avoid unnecessary adjournments.

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