Delhi High Court Grants Bail To Person Accused Of Fraudulently Claiming ITC

The applicant, Pulkit, has sought bail in respect of the offence of setting up a number of fictitious companies, which were being used for the purposes of defrauding the government. The accused have allegedly opened bank accounts in fictitious names and provided their telephone numbers and email addresses.

The FIR alleged cheating and fraud by Saraswati Enterprises, of which Sanjay Garg is the proprietor, causing a loss to the government for the sum of Rs. 9.97 crores. The applicant was an employee of Saraswati Enterprises.

As per the chargesheet, the allegation regarding fraudulent transactions causing loss to the government was based upon transactions for the period from 27.08.2017 to 22.11.2017. It was stated that the addresses, having been found to be fictitious, the mobile numbers and email addresses used for verification at the time of GST registration were investigated. One of the mobile numbers used in the registration as well as in the opening of the bank account was found to be in the name of the applicant.

The applicant submitted that he had been an employee of Shubham Khandelwal only since early 2018, and the mobile number was transferred to the applicant's name after the transactions in question had already taken place. The registration of the suspect accounts and the opening of the bank account using the mobile number all predated the transfer of the number to the present applicant. Even in the chargesheet, investigation of the transactions with the purchasers dealing with Saraswati revealed that Shubham Khandelwal was the person who supplied the bills and accepted payments in the account of Saraswati.

The department contended that, as per the Status Report, the applicant was involved in a complex and well-planned scheme of setting up fictitious companies by using fake identities, in order to generate bogus invoices and claim an unauthorised input tax credit to the detriment of the government. The applicant is not entitled to be released on bail.

The court noted that there was no suggestion in the status report that the applicant had prior criminal antecedents, nor was there any material to suggest that he was a flight risk. The applicant has been in custody for a period of approximately nine months since 14.07.2021.

The court observed that the evidence was largely documentary and had already been placed before the trial court. The chances of the applicant tampering with the evidence are therefore unlikely.

The court granted the bail on the condition of furnishing a personal bond in the sum of Rs. 1,00,000 with two sureties of the like amount, one of which will be from a blood relative of the applicant, to the satisfaction of the Trial Court.

The court directed the applicant to inform the investigating officer and the trial court in advance of any change in his residential address.

Case Title: Pulkit Versus State

Citation: 2022 LiveLaw (Del) 332

Dated: 12.04.2022

Counsel For Petitioner: Senior Advocate Sunil Dalal along with Advocates Kapil Madan and Gurmukh Singh Arora  

Counsel For Respondent: Advocate Amit Chadha

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