The Court of Additional Sessions Judge, Meerut, has rejected the bail plea of Yasin Sheikh, a key accused in one of the country’s largest GST fake firm rackets.
The bench of Achal Narain Saklani (Additional Sessions Judge) has observed that the accused used to deliver fake bills/invoices and collect cash against the same. Fake invoices, incriminating documents, a car purchased from proceeds of crime, POS machine and cash counting machine have been recovered from the co-accused persons. Incriminating material have been recovered at the instant of co-accused regarding evasion of GST. On account of receipt of fake tax invoices without actual receipt of goods fraudulent availment of input tax credit to the tune of Rs.174.46 Crores and further passing on of ITC to the tune of Rs.163.50 Crores, is detected till date. The applicant, if released on bail will definitely try to destroy the evidence and influence the witnesses and there is his flight risk.
The scam, unearthed by the Directorate General of GST Intelligence (DGGI), involves the creation of over 3,100 fictitious firms and fraudulent input tax credit (ITC) claims exceeding Rs. 163 crore.
Yasin Sheikh was arrested on July 19, 2023, by the DGGI Ghaziabad Unit, following earlier arrests by Noida Police under FIR Nos. 203 and 248 of 2023. The investigation revealed the accused’s involvement in the creation of fake firms using forged documents such as Aadhaar and PAN cards, enabling the generation of bogus invoices without any actual supply of goods or services. These firms were then used to avail and pass on fake ITC, inflicting significant losses on the government exchequer.
During the hearing of Bail Application, the court was informed that Sheikh, along with other co-accused, had played a central role in setting up shell entities that funneled fake GST credits through an elaborate chain of transactions. The DGGI’s probe confirmed that at least ₹163.50 crore worth of fraudulent ITC had been passed on through non-existent firms, and further recovery and forensic analysis were ongoing.
The defence argued that Sheikh had already spent nearly two years in judicial custody without trial, and highlighted that co-accused Gaurav Singhal and Gurmeet Singh Batra had already been granted bail by the Allahabad High Court. Sheikh’s counsel also cited recent Supreme Court judgments, including Vineet Jain v. Union of India, to emphasize that prolonged pre-trial detention violates Article 21 of the Constitution and that economic offences involving documentary evidence warrant a more lenient bail approach.
Lakshya Kumar Singh, the Special Prosecutor for the Department stated that Sheikh’s release posed a risk of tampering with evidence, influencing witnesses, and even fleeing jurisdiction. They also underlined the organized nature and scale of the fraud, with ₹2,645 crore in fake GST credits suspected across the country from over 6,400 firms linked to the 3,100 bogus mother firms.
The court sided with the prosecution, observing that the offence is grave and has a substantial impact on public interest and the financial integrity of the taxation system. Refusing bail, the court noted that sufficient grounds existed to believe that the accused might hinder ongoing investigations if released.
The rejection of Sheikh’s bail plea sends a strong message amid increasing scrutiny on GST-related frauds. Authorities have intensified efforts to clamp down on tax evasion and shell companies, with nationwide raids, arrests, and recovery proceedings underway in connection with this massive racket.
Case Details
Case Title: Yasin Sheikh Versus D.G.G.I., CGST
Case No.: Bail application No. 2878 of 2025
Date: 26.06.2025
Counsel For Petitioner: Ritesh Kumar Jaiswal
Counsel For Respondent: Lakshya Kumar Singh
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