The Faridabad Court has refused the Bail in Rs. 60 Crore Fake Input Tax Credit (ITC) Case as IMEI Tracking of iPhones Reveals No Goods Movement.
The bench of Ajay Sharma (Additional Sessions Judge, Faridabad) has observed that the entire supply chain is fictitious. Complete details of IMEI numbers of Apple phones are still awaited. During search at the residential premise of the applicant and co-accused, a total of 37 credit cards of various persons and banks were also recovered, the investigation of which is also underway. Initially, the fraud was of Rs. 30.4 Crore but as per investigation conducted so far, the same has been stretched to now 60 crore approx.
The applicant Sanket Mittal and co-accused Naveen Tayal issued fake invoices so as to avail and pass on ineligible Input Tax Credit (ITC) without actual supply of goods and thus, caused loss of more than 30.4 Crore to the Govt. The applicant was arrested on 06.05.2025 and is in judicial custody now.
The regular bail application under Section 483 BNSS is filed by the applicant-accused namely Sanket Mittal (the applicant) in the complaint. First regular bail application of the applicant was dismissed as withdrawn from this Court.
Harpreet Singh, Sr. Standing Counsel for the department contended that the applicant is the mastermind behind the entire fraud. The applicant never received actual goods and manipulated the GST returns in order to pass fraudulent input tax credit. He issued tax invoices without actual supply of goods in a planned manner with an intention to defraud the Government exchequer and to earn illicit money by misusing the Government machinery with a criminal intent, to evade the tax. The applicant further did not provide details of IMEI number of I-phones claimed to have been purchased from suppliers and sold to its buyers.
The department contended that the department has submitted that the competent authority has accorded sanction for prosecution of the accused persons as they have committed offences punishable under Section 132 (1) (b) (c) () & (1) of CGST Act, 2017. The applicant did not co-operate in the investigation and also did not disclose the correct password of his mobile phone. The case is based on voluminous documents and transactions involving a number of persons in the entire chain and the same cannot be investigated in a short span of time. Further investigation is still pending as the recipients of goods from the applicantβs firm are yet to be investigated. Further, from where the applicant purchased the actual goods / mobile phones is yet to be investigated. The transporters, suppliers of M/s Balaji Mobile Addition and M/s Monit Enterprises are yet to be investigated in detail.
The court noted that the objective behind treating βeconomic offencesβ as a separate class of crime stems from the fact that compared to a regular offence which is generally directed towards a particular person or section of the society, economic offences affect and harm the society at large by impairing the economic stability and well-being of the nation. The distinct treatment of economic offences vis-Γ -vis general offences at the stage of bail can be traced back to 2013, where the Supreme Court in βY.S.Jagan Mohan Reddy vs C.B.Iβ – 2013 (7) SCC 439 and βNimmagadda Prasad v. CBIβ – (2013) 7 SCC 466, discussed the concept of an economic offence in length and its ramifications on the society at large.
The court while dismissing the bail application looked into the gravity and seriousness of alleged offences and without commenting on the merits of the case, the applicant is not entitled for grant of regular bail at this stage.
Case Details
Case Title: Sanket Mittal Versus Central GST Department
Case No.: CIS No.BA 3974 of 2025
Date: 25.07.2025
Counsel For Applicant: N.K. Sharma with Sh. P.S. Chauhan, Sh. Deepak Gautam, Sh. O.P Saini and Sh. Amit
Counsel For Respondent: Harpreet Singh, Sr. Standing Counsel
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