The Allahabad High Court has denied bail to two accused—Ankit Johri and Shiva Johri—who are alleged to have played a key role in a Rs. 2 crore GST Input Tax Credit (ITC) fraud by creating fictitious firms and generating bogus invoices.
The bench of Justice Ashutosh Srivastava has observed that the culpability of the applicants in the commission of crime stand established prima facie from the material collected during investigation. The applicants along with co-accused Sudip Kumar utilizing his Aadhar Card and PAN card created M/s Bharat Building Materials a fictitious, non existing bogus firm and by showing false e-way inward bills from another bogus firm created using the Broad Band Internet Connection of Ankit Johri, namely, M/s Lam Enterprises showing outward E-way bills for supply of cement without the goods being transferred in physical form and tax to the time of Rs. 2,10,30,000/- has been evaded.
The case arises from an FIR registered as Case Crime No. 296 of 2025 at Police Station Jaswant Nagar, District Etawah. As per allegations, a firm—M/s Bharat Building Material—fraudulently availed ITC of approximately ₹99.41 lakh on the basis of fake invoices issued by another entity, M/s Lam Enterprises, without any actual movement of goods. The total alleged tax evasion in the matter is stated to be over ₹2.01 crore.
During the course of investigation, the role of the accused applicants surfaced. The prosecution alleged that the applicants were instrumental in setting up fictitious firms using Aadhaar and PAN credentials of other persons and were involved in generating fake e-way bills to depict non-existent transactions of cement supply. It was further alleged that such fabricated documentation was used to fraudulently claim ITC, causing substantial loss to the State exchequer.
The applicants argued that they were merely freelance GST service providers who assisted traders in filing returns and had no role in the alleged fraud. It was contended that their involvement was limited to data entry or uploading figures on the GST portal as instructed by clients, without any criminal intent. The defence also emphasized that the applicants were not named in the original FIR and were implicated later on the basis of statements of co-accused persons, with no direct recovery or money trail linking them to the offence.
The applicants further argued that the allegations pertain to offences under Section 132 of the CGST Act, 2017, which is a complete code in itself, and therefore invocation of provisions of the Bharatiya Nyaya Sanhita, 2023 was legally impermissible. It was contended that applying general penal law alongside GST provisions amounted to bypassing statutory safeguards provided under the special enactment.
The department submitted that the investigation clearly established the involvement of the applicants in the fraudulent scheme. It was argued that the accused, in collusion with other co-accused, created bogus firms and used fake documentation to claim ITC without actual supply of goods, thereby committing serious economic offences.
The Court, after considering the submissions, rejected the argument that GST law excludes the application of general criminal law. Relying on the Division Bench judgment in Govind Enterprises v. State of U.P., the Court held that there is no bar on lodging FIRs under penal law even when the same act also constitutes an offence under GST statutes. It further observed that provisions of GST law are “without prejudice” to other laws, thereby permitting parallel prosecution.
The Court also held that the Supreme Court judgment in Sharat Babu Digumarti would not apply to the present case in light of the statutory framework under GST laws, which allows for independent criminal prosecution.
The Court noted that a prima facie case was made out against the applicants based on material collected during investigation. It observed that the accused were involved in creation of fictitious entities and generation of fake e-way bills to facilitate fraudulent ITC claims. Considering the seriousness of the allegations and the nature of the offence, the Court declined to grant bail at this stage.
The bail application was rejected, reinforcing the principle that economic offences involving GST fraud and fake invoicing may invite prosecution not only under tax laws but also under general criminal statutes where elements of fraud and conspiracy are established.
Case Details
Case Title: Ankit Johri And Another Versus State of U.P.
Case No.: Criminal Misc. Bail Application No. – 10225 Of 2026
Date: 1 6/04/2026
Counsel For Petitioner: Avijit Saxena
Counsel For Respondent: G.A.
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