The Court of Additional Sessions Judge, Meerut, has rejected the bail plea of Azharuddin, proprietor of M/s New Global Scrap Traders, who is accused of fraudulently availing Input Tax Credit (ITC) worth Rs. 23.47 crore using fake invoices without any actual supply of goods.
The bench of Achal Narain Saklani (Additional Sessions Judge) observed that on account of receipt of fake tax invoices without actual receipt of goods fraudulent availment of input tax credit to the tune of Rs. 23,47,68,801/- 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.
Azharuddin was arrested on June 13, 2025, by officials of the Central Goods and Services Tax (CGST) Commissionerate, Gautam Buddha Nagar, following an extensive investigation. The department unearthed that his firm had allegedly procured bogus invoices from nine fake or non-existent suppliers across financial years 2021–22, 2022–23, and 2023–24. All the supplier firms, including M/s Allied Decorators, M/s Shine Enterprises, and M/s Victory Sales Corporation, were found non-operational during searches.
The department claimed that Azharuddin had confessed during his recorded statements on June 12 and 13, 2025, admitting to the procurement of invoices without any goods being supplied. His firm allegedly utilized the ITC based on these fake documents, thereby violating Section 132 of the CGST Act, which deals with fraudulent activities involving tax evasion and is punishable with imprisonment up to five years.
However, Azharuddin’s counsel vehemently denied the charges, alleging illegal detention for over 48 hours before formal arrest, which he argued violated Article 22 of the Constitution and the Bhartiya Nagarik Suraksha Sanhita, 2024. The defence contended that the accused was cooperating with the investigation and that no physical custody or further interrogation was necessary. It was further asserted that all GST transactions were conducted through the government portal, and suppliers were verified through GSTN at the time of trade.
In rebuttal, Lakshya Kumar Singh, the Special Prosecutor maintained that economic offences, especially those involving fake ITC claims, undermine the national economy and must be treated with severity. He argued that releasing the accused could lead to destruction of evidence, tampering with witnesses, and risk of absconding.
After hearing both sides and reviewing the gravity of the alleged offence, the court ruled that the accusations involve serious financial crime with significant loss to the exchequer. Citing various Supreme Court precedents that stress a stricter approach in economic offences, the court concluded that granting bail at this stage would not be appropriate.
The court rejected Bail application of Azharuddin, filed under Sections 132(1)(b), 132(1)(c), and 132(1)(i) of the CGST Act, 2017.
Case Details
Case Title: Azharuddin Versus CGST and Central Excise Commissionerate
Case No.: Bail application No. 4262 of 2025
Date: 16.07.2025
Counsel For Applicant : Parvez Alam
Counsel For Respondent: Lakshya Kumar Singh
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