Gauhati High Court Grants Anticipatory Bail to Accused in ₹199.31-Crore Fake Input Tax Credit Case
Sanchayita Lahkar
The Gauhati High Court at Itanagar, Single Bench of Justice Kardak Ete granted anticipatory bail to an accused in a case involving alleged circulation of fake Input Tax Credit worth ₹199.31 crore, passed to 58 firms across 11 States through fabricated invoices amounting to ₹658.88 crore. The case concerned a purported network led by one of the accused who allegedly created a fictitious firm, M/s Siddhi Vinayak Trade Merchants, using forged documents including a fake judicial seal, Aadhaar, PAN, and electricity bills. The Court found that custodial interrogation was unnecessary as the applicant had cooperated with the investigation.
The case arose from a First Information Report lodged by an Inspector of the Central Goods and Services Tax (CGST) and Central Excise, Itanagar Commissionerate, alleging that a firm named M/s Siddhi Vinayak Trade Merchants had fraudulently obtained a GST registration by using a forged rent agreement bearing a fake seal of the Judicial Magistrate First Class, Changlang, along with fabricated documents such as Aadhaar, PAN card, and electricity bill. The firm was alleged to have issued fake invoices amounting to approximately ₹658.88 crore, resulting in wrongful Input Tax Credit claims of about ₹199.31 crore that were passed to 58 firms across 11 States.
The applicant, who runs a business under the name M/s National Power in West Bengal, sought anticipatory bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The prosecution contended that the applicant had connections with one of the main accused, who was alleged to be operating the fictitious firm. The applicant claimed he had no involvement in the fraudulent activities and had only been in communication with the main accused in connection with a personal financial transaction.
The prosecution submitted the case diary and status report, noting that the applicant’s statement under Section 180 of BNSS, 2023 had been recorded. The statement was corroborated by his bank records and WhatsApp communications with the main accused. It was further stated that the principal accused had already been released on bail as the charge sheet was not filed within the prescribed statutory period.
The investigation materials included statements from CGST officers, witnesses, and documentary evidence such as forged rent agreements and fabricated invoices. The offences were registered under Sections 120B, 420, 467, 468, 471, 473, and 474 of the Indian Penal Code, alleging conspiracy, cheating, forgery, and use of forged documents.
The Court recorded that “fake Input Tax Credits worth Rs. 199.31 crores were passed to 58 firms across eleven States using fabricated invoices totalling Rs. 658.88 crores.” Statements of CGST officers and witnesses supported the allegations, while bank and call records linked Ashutosh Kumar Jha and his associates to the fraudulent transactions.
The Court stated that “on careful perusal of the Case Diary and the investigation as projected by the police, it prima facie appears that the accused persons had fraudulently obtained the GST ID using forged rent agreement with fake seal of Judicial Magistrate First Class, Changlang along with other forged documents including Aadhaar Card, PAN Card and electricity bill and thereby subsequently raised fake invoices with huge amounts defrauding the government exchequer.” It observed that the connection between the applicant and the main accused was discernible through their communication records but “same appears to be a matter of investigation.”
The Court observed that “on being examined and recording of statement, custodial interrogation of the accused/applicant appears to be not required.”
Justice Ete concluded, “I am of the considered view that the accused/applicant is entitled to be admitted to the privilege of pre-arrest bail.” Accordingly, the Court granted Faiz Ahmed the privilege of pre-arrest bail in connection with Itanagar P.S. Case No. 182/2024. The order stated that “the interim bail granted to the accused/applicant vide order dated 17.09.2025 is hereby made absolute in the same terms and conditions.” With that, the anticipatory bail application stood disposed of.
Advocates Representing the Parties:
For the Petitioner: Md. Apzal Ansari, Advocate.
For the Respondent: Ms. L. Hage, Additional Public Prosecutor for the State of Arunachal Pradesh, assisted by P.P. Tania Kipa.
Case Title: Faiz Ahmed v. The State of Arunachal Pradesh
Neutral Citation: GAHC040013632025
Case Number: AB/103/2025
Bench: Justice Kardak Ete
