The Allahabad High Court has granted interim anticipatory bail to a businessman accused of wrongly availing Input Tax Credit (ITC) on purchases made from firms whose GST registrations were retrospectively cancelled, while also seeking clarification from the GST Department regarding the retrospective cancellation of the supplier entities.
The bench of Justice Avnish Saxena after considering the nature of allegations, the documentary character of evidence, low flight risk, and the applicant’s assurance to cooperate in the investigation granted interim protection.
The applicant, Sanjay Kumar Jain, sought anticipatory bail in connection with FIR No. 0057 of 2026 registered at Medical College Police Station, Meerut, under Section 420 of the Indian Penal Code.
According to the allegations recorded in the FIR, the applicant, proprietor of M/s Shree Mahaveer Export, allegedly claimed wrongful ITC during the financial year 2018-19 on purchases of semi-processed cricket bats from two firms — Paras and Kenkam International — whose GST registrations were retrospectively cancelled.
Senior counsel appearing for the applicant argued that the prosecution under the IPC amounted to double jeopardy because proceedings under Section 132 of the Central Goods and Services Tax Act, 2017 were already pending against the applicant. It was contended that Section 132 itself provides penal consequences for GST-related offences and therefore separate criminal prosecution under the IPC was unwarranted.
The defence further submitted that the applicant had no prior criminal history and was merely a businessman carrying on legitimate commercial activities. It was also argued that there are judicial precedents recognizing that retrospective cancellation of a supplier’s GST registration does not automatically disentitle a purchaser from claiming Input Tax Credit. The applicant also relied upon various Supreme Court judgments to contend that custodial interrogation was unnecessary where the evidence was primarily documentary in nature.
On the other hand, the GST Department opposed the anticipatory bail plea and argued that the case did not involve double jeopardy because the IPC and GST laws operate in separate fields. The Standing Counsel submitted that the applicant had shown purchases from allegedly non-existent firms and therefore penal provisions under general criminal law were also attracted. It was additionally pointed out that related issues were already pending consideration before the High Court in writ proceedings.
During the hearing, the Court specifically noted the submission of the Standing Counsel that instructions received from the department did not contain documents relating to the retrospective cancellation of Paras and Kenkam International. Time was therefore sought by the department to place those documents on record.
While considering the anticipatory bail application, the Court referred to the landmark Supreme Court judgments in Gurbaksh Singh Sibbia v. State of Punjab, Siddharam Satlingappa Mhetre v. State of Maharashtra, and Sushila Aggarwal v. State (NCT of Delhi), reiterating that courts must assess factors such as gravity of accusations, criminal antecedents, necessity of custodial interrogation, possibility of false implication, willingness to cooperate in investigation, and flight risk while deciding anticipatory bail pleas.
Accordingly, the Court directed that the applicant shall appear before the trial court or investigating officer within 30 days and shall be released on interim anticipatory bail upon furnishing a personal bond of Rs. 25,000 along with two sureties of the like amount.
The Court imposed several conditions, including that the applicant shall not tamper with evidence, shall cooperate during investigation and trial, shall not influence witnesses, and shall not leave India without prior permission of the concerned court.
The matter has now been listed for further hearing on July 23, 2026, and the parties have been permitted to exchange affidavits in the meantime.
Case Details
Case Title: Sanjay Kumar Jain Versus State Of UP
Case No.: BNSS No. – 3426 of 2026
Date: 01/05/2026
Counsel For Petitioner: Sahibe Alam
Counsel For Respondent: G.A.
Read More: GST Fraud | Allahabad High Court Grants Bail To Employee Accused
