Ishak Shah vs. Union Of INDIA

Held

The Court allowed the bail application. The Chief Justice considered the facts and circumstances of the case, particularly noting that a complaint had already been filed against the applicant and that the applicant had been in jail since August 8, 2025. The Court was of the view that the conclusion of the trial was likely to take some time, and therefore, the applicant was entitled to be released on 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. The bail order was to remain in force until the disposal of the case. The Court did not expressly leave any issue undecided.

Facts

The applicant, Ishak Shah, Director of M/s Indium Metals Alloy Private Limited, filed a bail application under Section 483 of the Bhartiya Nagarik Suraksha Sanhita, 2023. He was arrested in connection with Crime No. 783/2025 registered by the Director General of GST Intelligence, Raipur. The prosecution alleges that the applicant created bogus firms to generate fake invoices and E-way bills for Aluminum ingots and other products without actual supply, thereby wrongfully availing and utilizing fake Input Tax Credit (ITC). The alleged wrongful availment of ITC amounts to Rs. 5,28,79,620/- for himself and Rs. 17,98,24,996/- for the fake firms created by him during the financial years 2023-2024 to 2025-2026 (till June). The applicant has been in jail since August 8, 2025.

Key Issues

1. Whether the applicant is entitled to regular bail under Section 483 of the Bhartiya Nagarik Suraksha Sanhita, 2023, considering the allegations of creating bogus firms, issuing fake invoices and E-way bills, and wrongfully availing Input Tax Credit (ITC) amounting to over Rs. 23 crores, punishable under Sections 132(1)(b), 132(1)(c), 132(1)(f) of the Chhattisgarh GST Act, 2017, read with other relevant sections. Petitioner's arguments: The applicant claims innocence, stating that all transactions were conducted with valid GST numbers and reflected on the GST portal. He argues that E-way bills are generated after online verification and goods movement is handled by third-party transporters, which the authorities failed to verify. He denies creating bogus firms or wrongfully availing/passing ITC, asserting compliance with GST requirements and maintenance of GSTR-3B forms. He contends his arrest is illegal due to procedural violations and that proceedings under the GST Act are summons-triable. He also highlights that the investigation is ongoing and lacks sufficient material for continued incarceration. Non-applicant's arguments: The learned counsel for the non-applicant opposed the bail application but could not dispute that a complaint had been filed against the applicant.