Vikram Mandhani vs. Union Of INDIA

Held

The Court granted regular bail to the applicant, Vikram Mandhani. While acknowledging the seriousness of the allegations regarding fake invoices and wrongful availment of ITC, the Court noted that the applicant's role was primarily based on documentary evidence already seized, and a charge sheet had been filed. The Court considered that the applicant had been in jail since December 20, 2025, the trial was yet to commence, and no further custodial interrogation appeared necessary. The Court also found merit in the applicant's contention regarding the absence of direct evidence of personal gain and the case being largely based on circumstantial evidence. Without commenting on the merits of the case, the Court found it inclined to grant bail. The applicant was directed to furnish a personal bond of Rs. 1,00,000/- with one solvent surety to the satisfaction of the concerned Court, with the order to remain in force till the disposal of the case.

Facts

The applicant, Vikram Mandhani, was arrested on December 20, 2025, in connection with a GST intelligence case. The Directorate General of GST Intelligence (DGGI), Zonal Unit, Raipur, alleges that the applicant, in connivance with co-accused Aman Kumar Agrawal, was involved in issuing fake invoices amounting to ₹8,57,15,507/- and fraudulently availing Input Tax Credit (ITC). Investigations revealed the applicant operated email IDs of fictitious firms, possessed login credentials for GST and E-way bill portals of approximately 60 such firms, and routed funds through banking channels to legitimize bogus transactions. The applicant claims innocence, alleging false implication, procedural irregularities, and coerced statements. He has been in custody since his arrest, and a charge sheet has been filed.

Key Issues

1. Whether the essential ingredients of Section 132(1) of the CGST Act, 2017, are satisfied, specifically regarding the applicant retaining or deriving a benefit from the alleged transactions? 2. Whether the investigation suffers from procedural irregularities, including selective prosecution, premature charge sheet filing, and unlawful seizure of property? 3. Whether the applicant's continued custodial detention is warranted given his alleged role, the nature of the offence, and the fact that a charge sheet has been filed? Petitioner's Arguments: The applicant contends that Section 132(1) of the CGST Act requires proof of benefit derived, which is absent and solely attributable to the co-accused. He argues the offence is fiscal/semi-civil, recovery proceedings are underway, and custodial detention is unwarranted as he has been incarcerated since December 20, 2025, and the trial is yet to commence. He further alleges procedural irregularities, biased prosecution, premature charge sheet filing, unlawful seizure of his mobile and SIM, and coerced statements. He asserts no direct proof of involvement, no recovery from him, no criminal antecedents, and significant familial and medical responsibilities, making continued detention causing irreparable hardship. He relies on the principle that custodial detention is not justified when a charge sheet is filed and trial is pending. Non-applicant's Arguments: The Union of India argues the applicant was aware of the co-accused's business and knowingly participated in creating fake firms for bogus invoices and fraudulent ITC, earning commission. His role was active, including obtaining GST registrations using others' documents, operating emails, managing login credentials, issuing fake invoices, and maintaining accounting records. Recovered evidence like ID-password sheets, tally data, excel sheets, SIM cards, and WhatsApp chats establish his direct involvement. They claim he is a habitual offender and the offence is a grave economic one causing significant loss to the exchequer. They deny procedural violations, stating search and seizure were lawful. They argue the investigation into beneficiaries is ongoing and releasing the applicant could lead to witness tampering or hampering the investigation.