Pavan Madanlal vs. The Superintendent Of Central GST
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Cause title — parties, addresses and appearances
The Court made the following: COMMON ORDER
IN THE HIGH COURT FOR THE STATE OF TELAT{GANA HYDERABAD THE HONOURABLE SMT. JUSTICE K. SUJANA CRIMINAL PETITION Nos.2OlO & 2OLL of 2ot25 DATE: 05.03.2026 Crl.P.No.2O1O of 2O26 BETWEEN: Pavan Madanlal .....petitioner/accused No. 1 And The Superintendent of Central GST, Anti Evasion, Medchal GST Commissionerate, lL-4-649 /8, Lakdikapul, Hyderabad - 500004. crr.p.No.2ol1 of2o26 ""'Respondent/complainant BETWEEN: Jagadish Upadhyay .....petitioner/accused No.2 And The Superintendent of Central GST, Anti Evasion, Medchal GST Commissionerate, LI-4-649 lB, Lakdikapul, Hyderabad - 500004. . . .Respondent/ complainant
2 sKs,J Crl.P.Nos.2O1O, 2O11 ot 2o126 COMMON ORDER These Criminal Petitions are filed praying this Court to enlarge the petitioners on bail who are arrayed as accused Nos.l and 2 in FIR No. GEXCOM/AE/INV / cST I 2502 I 2O24-AE of Anti Evasion Wing, Medchal GST Commissionerate, Hyderabad, registered for the offence punisha-ble under Sections 132(1)(b),(c), (0 and (l) rcad with Sccrion 132(lxi) of the Central Goods and Service Tax Act, 2Ol7 -
The brief facts of the case are that the petitioners/accused Nos.l and 2 were arrest-ed in the above crime registered by the Anti-Evasion Wing, Medchal Commissionerate, Hyderabad for the offences punishable under Section 132(1)(b), (c), (0 and (l) read with Section 132(1Xi) of the Central Goods and Services Tax Act, 2OlT. The allegation against the petitioners is that they deliberately availed and utilized frauclulent Input Tax credit (ITC) to the tune of about Rs.21.89 Crores on the strength of fake invoices issued by non-existent firms without actual receipt of goocis, thereby causing wrongfui loss to the { (^
v ,, 3 sKsrJ Crl.P.Nos.2O1O, 2Ol 1 of 2o.26 Government exchequer during the period from 2O2t-22 to 2025-26. The petitioners were arrested on 28.O1.2026 and were produced before the juri ictional Magistrate on 29.OL.2O26, who remanded them to judicial custody. Since then, they have been in custody. Their earlier bail application filed before the Special Court for Economic Offences was dismissed, and hence, the present criminal petitions are filed seeking grant of regular bail.
Heard Sri V. Padmam Narayan, learned counsel appearing on behalf of the petitioner/accused No.l in Crl.P.No.2OLO of 2026 and Sri R. Umender Kumar, learned counsel appearing on behalf of the petitioner/accused No.2 in Crl.P.No.2OLL of 2026 as well as Sri Dominic Fernandes, learned Senior Standing Counsel for Central Excise, Customs and Service Tax Department and DRI Counsel appearing on behalf of the respondent - State.
Learned cournsel for the petitioners, respectively, submitted that the petitioners are innocent and have been falsely implicated in the present case and that the petitioners have cooperated with the investigation from the 4 sKs,J Crl.P.!tos.2O1(}, 2O11 of 2o26 beginning and have been attending before the authorities pursuant to summons issued under Section 70 of the CGST Act for nearly six months prior to their arrest, and therefore, there is absolutely no question of them absconding. They further submitted that all relevant documents, books of accounts, electronic devices and other material have already been seized by the department and statements of witnesses have also been recorded, and therefore, no useful purpose would be served by continued incarceration of the petitioners and that the entire case is based on documentar5r evidence already in the custody of the department and there is no possibility of tampering with the evidence. Therefore, they prayed the Court to grant pre- arrest bail to the petitioners by allowing these Criminal Petitions.
On the other hand, learned Standing Counsel appearing for the respondent department strongly opposed the grant of pre-arrest bail and Iiled counter affidavit stating that the investigation has revealed that as many as 2L suppliers shown by M/s. Hari Batteries were found to be non-existent at their declared places of business, and the fr
5 sKs,J Crl.P.Nos.2O1O' 2Ol1 of 2OXi rental agreements and bank details furnished by them were also found to be bogus, leading to cancellation of their GST registrations with retrospective effect. He further submitted that forensic analysis of WhatsApp chats, CCTV footage, financial transactions and statements of witnesses clearly establish that the petitioners actively coordinated with a middleman for obtaining fake invoices, collected cash, and created artificial banking transactions to generate fake ITC' The material on record shows their active involvement in falsification of documents and availment of fraudulent ITC' He contended that the petitioners did not voluntarily disclose the facts during investigation and admitted their role only after being confronted with incriminating evidence' He further contended that the petitioners were involved' in similar violations earlier and continued fraudulent activities even during the course of investigation, which shows their propensit5r to commit offences. The magnitude of the fraud is substantial and involves huge loss to public revenue, and economic offences constitute a separate class of offences affecting the hnancial health of the nation and therefore
6 sKs,J Crl.P.trtos.2o1(), 2O11 of 20126 require a strict approach in the matter of bail. Therefore, he prayed the court to dismiss these criminal petitions. 6- In the tight of the submissions made by both the parties and on perusal of the material available on record, it appears that the main contention of the petitioners is that they have been in custody since 2g.01.2026 and the5r have cooperated with the investigation for the lasr six months. It is their case that most part of the investigation is alreacly completed and there are no concrete allegations against them and that they contend that the petitioenrs were falsely implicated and therefore they seek gra.t of bail. on the other hand, learned Standing counsel specil-rcally contended that the investigation is still at a crucial stage. Though the statements of the petitioners were recorded earlier, they did not disclose the true facts and admitted the offence only after they were confronted with material collected during investigation. It is also contended that initially the fraud amount was quantified at Rs.2I.g9 crores and there is every possibility of the amount increasing as the investigation progresses. Therefore, he prayed to dismiss the petitions. The learned counser for the petitioners relied (' l.
\ \ 7 sKs,., Crl.P.Nos.2O1O, 2O1 1 of 2o26 upon the judgment of the Hon'ble Supreme Court in Vineet Jain v. Union of Indiar and also the judgment of the Punjab and Haryana High Court in Manish Kumar v. Directorate General of GST Intelligence2 to contend that prolonged custody is a ground for bail. However, the learned Standing Counsel relied upon the judgment of the Hon'lrle Supreme Court in Radhika Agarwal v. Union of India3 to contend that economic offences require a different approach in matters of bail.
Considering the submissions made by both sides and the judgments relied upon, this Court is of the opinion that the petitioners cannot claim parity with the judgments cited by thern, as the facts are different and the custody period in the present case is shorter. The medical condition of the relative of the petitioners also cannot be treated as a suffrcient ground at this stage. Having regard to the nature of allegations, the magnitude of the alleged fraud and the stage of investigation, at this stage, this Court does not lind l Crimanal Appeal No.2269 of 2025 decided on 28-01-2025 'CRM-M€625-2025 (O & M) decided on 28.o7-2025 t zozs tttsc zzz \
8 sKs,J Crl.P.Itos.2OlO, 2011 of 2o26 any valid grounds to grant bail to the petitioners and the same are liable to be dismissed.
Accordingly, these Crirninal Petitions are dismissed. Miscellaneous applications, if any pending, shall stand closed P.PONNA KRISHNA TANT REGISTRAR /TFRUE COPY/' ECTION OFFICER The Anti-Evasion Wing, MedchalGST The Special Judge for Trial of cases under Hyderabad 3 One CC to SRl. V PADAMNARAYAN Advocate [OPUCI
One CC to SRl. DOt\,tlNlC FERNANDES (senior standing counsel for CBIC) Advocate IOPUCI 5 Two CD Copies []A.,lrsl_ To, 1 2 Hyderabad. Offences at Nampally, M. / /
HIGH COURT DATED: 0510312026 COMMON ORDER CRLP.No.2010 & 2011 ot 2026 ,/iJ* ,s{: ) ::-:--:-.:;:.,;t:.--. i\it SA+ii:r". '\,...\ I 07 APt,t 2026 }) * * P.drEl{ DISMISSING THE BOTH CRIMINAL PETITIONS a,( 1A j 1,b
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.