Rs 22 Crore Fake ITC Scam: Panipat Youth Denied Bail in Bogus Firm Network Case
The court has rejected a bail application of a 21-year-old Panipat youth accused of being involved in operating a bogus firm’s network and generating multiple crores of fake ITC.
The Directorate General of GST Intelligence (DGGI), Chandigarh Zonal Unit, had registered a case against the accused on January 09, 2026, under Sections 132(1)(b) and 132(1)(c), read with Section 132(1)(i) and Section 132(5) of the Central Goods and Services Tax (CGST) Act, 2017, along with Section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017.
The prosecution’s intelligence inputs unearthed that the accused was allegedly running a bogus firm network involving M/s Radha Trading Company, M/s Raj & Sons, M/s Aggarwal Paints & Sanitary Store, M/s SSB Traders, and M/s R.K. Enterprises for availing and passing ineligible ITC (Input Tax Credit) amounting to Rs 12.4 crore and Rs 10 crore, respectively. However, goods were not supplied in reality.
In conclusion, the concerned authorities carried out search operations at multiple locations linked to the accused, including his residence in Panipat and his business location in Panchkula, under Section 67 of the CGST Act. However, their officials discovered that most of the firms did not even exist; they only existed on paper.
During the operation, the officials found an iPhone 15 and other materials containing WhatsApp chats, unaccounted records, and electronic data related to fake invoice generation, commission calculations, and transaction details; they were all confiscated immediately. When interrogated, the accused accepted his involvement in generating invoices on instructions from associates and receiving commission for facilitating bogus billing.
A financial investigation suggested that money from illegal activities was transferred into the petitioner’s bank accounts. Digital evidence, such as chat messages and records, showed that the petitioner was involved in coordinating and managing accounts connected to the fraud.
The petitioner claimed that it is a 21-year-old accounts trainee who has been incorrectly implicated in the present matter. However, the prosecution claimed that the petitioner had claimed a key role in orchestrating the ITC fraud by running multiple fake firms, which did not even exist in reality, and making incorrect ITC claims using them.
