Father and Son Accused of ₹325 Crore Fake ITC Granted Bail: Gujarat High Court

The Gujarat High Court released a Jamnagar scrap trader and his son on regular bail, holding that ongoing investigation alone cannot justify detention for a Magistrate-triable offence capped at five years.

The Gujarat High Court has granted regular bail to a father and son accused of availing fake ITC of ₹325 crore through 21 fictitious firms, holding that further investigation alone is no ground to refuse bail once the statutory period is over. [Ayush Sureshchandra Shah v. State of Gujarat & Anr., 2026-juristway.com-3178-HC(Gujarat)-GST]

Justice Hasmukh D. Suthar allowed two applications under Section 483 of the BNSS by a common order. The applicants, the proprietor of M/s. Mandovara Trading Co., a Jamnagar metal scrap trader, and his son, were arrested under Section 69 on 22 Jun 2026 for offences under Sections 132(1)(b) and 132(1)(c).

The State alleged GST evasion of ₹23.08 crore and ITC of ₹325 crore availed without movement of goods, said further investigation could raise the figure, and argued that volatile electronic data could be tampered with. The applicants said the chargesheet had been filed, books and devices were seized, and the offence was triable by the JMFC with a maximum sentence of five years.

The Court held that investigation cannot go on endlessly and that tampering concerns are to be met by conditions under the triple test. It relied on Vineet Jain vs. Union of India (2023 SCC OnLine (SC) 2331), Sanjay Chandra vs. Central Bureau of Investigation ([2012]1 SCC 40) and Gudikanti Narasimhulu And Ors vs. Public Prosecutor, High Court of Andhra Pradesh ((1978)1 SCC 240), observing that keeping the accused in jail would amount to pre-trial conviction.

Bail was granted on a personal bond of ₹25,000 each with one surety, with conditions including surrender of passports, no travel outside Gujarat without permission, reporting to the department twice a month for three months, and cooperation with further investigation. The Court’s observations are not to influence the trial.

2026-juristway.com-3178-HC(Gujarat)-GST