Bail Denied In ₹704 Crore GST Fraud | Rajasthan High Court Cites Dummy Firms, Absconding Attempt And Suppression Of Criminal Past
Safiya Malik
The High Court of Rajasthan Single Bench of Justice Anand Sharma dismissed a bail application filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The Court held that the accused-petitioner was not entitled to the relief sought, in light of the serious economic offences alleged and his conduct during judicial custody. It directed that the accused’s continued detention was warranted due to the magnitude of the offence and the attempt to escape from lawful custody. The Court also clarified that the observations made were limited to the adjudication of the bail plea and shall not influence the trial proceedings.
The accused-petitioner, arrested in connection with an investigation led by the Directorate General of GST Intelligence (DGGI), Jaipur Zonal Unit, sought regular bail after being charged under Sections 132(1)(b)(c)(j) and (l) of the Central Goods and Services Tax Act, 2017. The case originated from a probe into M/s Om Sai Traders and Suppliers, suspected of fictitious grain trading. Analysis of GST returns and bank transactions pointed to involvement in fraudulent activity using fake firms.
The DGGI identified multiple fictitious entities through which exempted supplies were reported. These included entities that had been cancelled by the GST department for being non-existent. The scale of transactions, extending to ₹1800 crores over two years, involved ₹800 crores in suspicious cash transactions.
Subsequent raids revealed active participation by non-existent firms such as M/s Suraj Trading Company. Statements from individuals including Shri Vivek Garg implicated the petitioner, Ankit Bansal, as one of the masterminds. Further searches at the petitioner’s premises in Sonipat, Haryana, uncovered incriminating documents. A statement recorded from his wife confirmed the creation of fake GST firms.
Searches conducted on 31 May 2024 led to the seizure of unaccounted cash totaling ₹2.41 crore. Statements from other individuals, such as Rahul Tayal and Gaurav Jain, suggested that the petitioner was central to the creation and operation of at least 353 fake firms for fraudulent Input Tax Credit (ITC) generation.
The DGGI alleged that the petitioner, along with Rajesh Goyal, used identity documents of unsuspecting individuals to register fake firms. Fake invoices and bills were issued without actual supply of goods, facilitating ITC fraud running into hundreds of crores.
The petitioner challenged his arrest, alleging that he was apprehended on 31 May 2024 without being informed of the reasons and was denied communication with family or legal counsel. He claimed he was taken from Delhi to Jaipur under duress and that the summons were backdated to validate his detention. The arrest was formally shown on 3 June 2024.
The petitioner filed a writ petition challenging the legality of his arrest, which was pending. Meanwhile, a bail application before the Additional Sessions Judge was rejected. The petitioner contended that the maximum penalty for the alleged offences was five years and the trial was before a Magistrate. He further argued that the investigation was complete with the filing of the complaint on 31 July 2024 and no further custodial interrogation was required.
It was submitted that co-accused Rajesh Goyal had already been granted bail and that the petitioner was being selectively targeted despite cooperating with the investigation.
In support of his arguments, the petitioner cited several Supreme Court decisions including Vineet Jain v. Union of India, Ashutosh Garg v. Union of India, and Yash Goyal v. Union of India, all of which involved bail in GST-related offences.
In response, the DGGI submitted that the arrest was lawfully conducted, that statements were recorded in compliance with the CGST Act, and that the magnitude of fraud—₹704 crores—was serious. It was argued that the accused was central to an organized fraud involving multiple shell companies and dummy transactions intended to defraud the public exchequer.
The DGGI also pointed to the petitioner’s concealment of a prior criminal case involving cybercrime under Section 66D of the Information Technology Act, 2000 and Section 420 of the IPC. The petitioner had been in custody for over a month in that case but failed to disclose it in the current bail application.
Most significantly, it was revealed that while in custody, the petitioner attempted to abscond during a hospital visit on 24 May 2025. An FIR under Sections 261 and 262 of the Bharatiya Nyaya Sanhita was registered following the incident, which also implicated four police guards and the petitioner’s family members.
The DGGI submitted that given the petitioner’s conduct and influence, he posed a serious risk of absconding and tampering with evidence. The application for bail was, therefore, opposed in full.
The Court recorded in italicized form: “Bare reading the complaint would reveal that there are serious allegations against the accused-petitioner of creation of at least 353 fake/non-existing Firms with an intent to pass on fake ITC.”
It continued: “Magnitude of such fake ITC and tax evasion is also quite high around Rs. 704 Crores, which is likely to affect the economy to a great extent.”
Referring to Supreme Court jurisprudence, the Court stated: “Economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole.” Citing Y.S. Jagan Mohan Reddy v. CBI, the Court recorded: “White-collar crimes are more dangerous to society than ordinary crimes, as they are committed with deliberate calculation, breach of trust, and often result in significant financial loss to the public exchequer.”
Discussing the judgment in Vineet Jain, the Court clarified that “the aforesaid judgment does not confer absolute right of Bail upon an accused facing allegations under CGST Act.” It distinguished the facts by noting: “There are clear and manifest antecedents against the petitioner and the magnitude of allegations against him is quite higher, which is crossing more than 700 Crores.”
Addressing the conduct of the petitioner, the Court stated: “Concealment of relevant fact regarding antecedents in itself is a sufficient ground for denying discretionary relief of Bail.” The Court referenced Munnesh v. State of Uttar Pradesh (2025 SCC Online SC 1319), recording: “Non-disclosure of antecedents in Bail Application has been treated as suppression of fact, and discretionary relief of Bail has been denied only on this ground.”
On the attempted escape, the Court noted: “The accused-petitioner has also made a serious attempt to flee away from the custody during pendency of the instant Bail Application by using his influence and power.”
The Court issued its conclusive directive as follows: “Accordingly, the bail application filed by the accused-petitioner hereby stands dismissed.”
It added:“However, it is made clear that the observations herein are only for the purpose of adjudication of this bail application and shall not influence the trial proceedings in any manner.”
Recognizing the continuing detention, the Court instructed expeditious trial proceedings: “Since while rejecting the Bail Application, custody of the accused-petitioner is resultantly continued, the Trial Court is expected to conclude the Trial within a reasonable time, ensuring right of the accused petitioner regarding speedy trial as guaranteed by Article 21 of the Constitution of India.”
Advocates Representing the Parties
For the Petitioners: Mr. Swadeep Singh Hora with Mr. T.C. Sharma, Mr. Dinesh Bishnoi, Ms. Varuni Agarwal, and Mr. Siddhant Choudhary
For the Respondents: Mr. Kinshuk Jain, Senior Standing Counsel for DGGI with Mr. Jay Upadhyay
Case Title: Ankit Bansal v. Union of India through Directorate of GST Intelligence
Neutral Citation: 2025:RJ-JP:23052
Case Number: S.B. Criminal Miscellaneous Bail Application No. 4836/2025
Bench: Justice Anand Sharma
[Read/Download order]
