The Gujara High Court has granted bail to Sunil Hiralal Mandowara, accused of fraudulently availing Goods and Services Tax (GST) Input Tax Credit (ITC) worth over ₹10 crore by allegedly recording fictitious transactions with firms whose GST registrations were later cancelled.
Allegations by GST Authorities
According to the prosecution, the accused allegedly created multiple bogus firms using forged documents such as Aadhaar and PAN cards. He then purportedly carried out sham transactions with these firms to wrongfully claim ITC benefits exceeding ₹10 crore. Once the objective was achieved, the GST registrations of these firms were cancelled.
The counsel representing the GST department argued that the accused was the mastermind behind the creation of these fraudulent firms and the subsequent false transactions.
Defence Argument
Appearing for the petitioner, Advocate Apurva N. Mehta contended that the transactions in question were genuine and that goods were actually purchased from various firms. He argued that the cancellation of GST registrations occurred later due to lapses on the part of those suppliers, and the applicant had no role in their irregularities.
Court’s Observations and Decision
Justice M.R. Megdey noted that the investigation had been completed and a complaint filed. The Court observed that while the allegations were serious—punishable with imprisonment of up to five years—the accused had been in custody since December 2024. Considering the nature of allegations, the stage of proceedings, and the time already spent in custody, the Court held that the bail application deserved consideration.
The High Court granted bail on the furnishing of a personal bond of ₹10,000 along with one surety of the same amount, subject to specific conditions. The Court also made it clear that the trial court should not be influenced by the prima facie observations made while granting bail.
Case Details
- Case Title: Sunil Hiralal Mandowara vs State of Gujarat & Anr.
- Petitioner’s Counsel: Advocate Apurva N. Mehta
- Respondent No. 2’s Counsel: Advocate Utkarsh R. Sharma
The decision marks another significant development in ongoing GST fraud cases, highlighting the judiciary’s balancing act between safeguarding individual liberty and ensuring accountability in large-scale tax fraud matters.