Introduction:
In Chinu Kumar v. Directorate General of Goods and Services Intelligence, decided on 26 December 2025, the Delhi High Court, through a Vacation Bench of Justice Vikas Mahajan, granted regular bail to an Accountant accused of involvement in alleged GST invoice fraud and fraudulent availment and passing on of Input Tax Credit (ITC). The Court ordered his release on furnishing a personal bond of ₹5,00,000 with two sureties of the like amount, subject to strict conditions. The case arose out of an investigation by the Directorate General of GST Intelligence (DGGI) alleging the creation and operation of multiple fictitious firms for the purpose of generating and passing on fake ITC, with the alleged ultimate beneficiary being MBook Technology (now Metal Book Technologies Private Limited), a digital marketplace connecting metal suppliers and scrap dealers. While the DGGI claimed that the petitioner was an active participant in running fake firms alongside key individuals linked to the company, the petitioner maintained that his role was limited to that of an Accountant and that he derived no personal benefit from the alleged fraud. The High Court, applying settled principles governing bail in economic offences and relying significantly on the Supreme Court’s decision in Vineet Jain v. Union of India, held that continued incarceration was unwarranted, particularly in the absence of prior criminal antecedents, prolonged custody, and parity with co-accused already granted bail.
Arguments of Both Sides:
On behalf of the petitioner, it was contended that he was a professional Accountant who had merely rendered accounting assistance to one Navdeep Singh, a director and co-founder of MBook Technology Pvt. Ltd., and that he was not the mastermind, beneficiary, or principal operator of the alleged fraudulent scheme. Senior Advocate Sunil Dalal, appearing with a team of advocates, submitted that the petitioner had no previous criminal involvement, no independent control over the fictitious entities allegedly created, and no role in the ultimate utilisation of the purportedly fraudulent ITC. It was argued that the petitioner had been in judicial custody since 21 November 2025, and further detention would amount to pre-trial punishment, especially when the offence under Section 132(1)(c) read with Section 69 of the CGST Act, 2017 is triable by a Magistrate and does not attract life imprisonment.
The petitioner’s counsel further emphasised the principle of parity, pointing out that co-accused persons had already been granted bail by the Delhi High Court in 2024 (Bail Application No. 1968/2024), and there was no distinguishing factor that justified continued incarceration of the petitioner alone. It was also argued that the investigation was largely document-based, evidence had already been collected, and the petitioner’s continued custody was not necessary either for investigation or for securing his presence at trial. Relying on the Supreme Court’s jurisprudence, particularly Vineet Jain v. Union of India, counsel submitted that bail should be the rule and jail the exception in GST fraud cases unless extraordinary circumstances such as flight risk, habitual offending, or likelihood of tampering with evidence are demonstrated.
On the other hand, the DGGI, represented by Senior Standing Counsel Harpreet Singh, opposed the bail application by asserting that the petitioner was not a mere Accountant but an active participant in the creation and operation of multiple shell entities used for generating fake invoices and passing on fraudulent ITC. The Department submitted that the petitioner had knowingly assisted in the incorporation, documentation, and functioning of these fictitious firms and had thereby played a crucial role in enabling the large-scale GST fraud under investigation. It was contended that economic offences involving tax evasion have serious ramifications on public revenue and must be dealt with strictly.
The DGGI further argued that the investigation had revealed a well-orchestrated scheme, with the petitioner working closely with key individuals associated with MBook Technology, including Navdeep Singh. According to the prosecution, the scale of the alleged fraud and the sophistication of the modus operandi justified continued custody. The Department expressed apprehension that if released on bail, the petitioner could influence witnesses, tamper with evidence, or obstruct the investigation, and therefore, bail ought to be denied.
Court’s Judgement:
After carefully considering the rival submissions and perusing the status report placed on record, the Delhi High Court found the case to be a fit one for grant of regular bail. Justice Vikas Mahajan noted at the outset that the petitioner had no prior criminal antecedents, a factor that weighed significantly in his favour. The Court also took cognisance of the fact that co-accused had already been enlarged on bail, and the principle of parity demanded similar treatment unless compelling reasons existed to deny bail to the petitioner.
The Court observed that the petitioner had been in custody since 21 November 2025, and the offence alleged under the CGST Act was triable by a Magistrate, indicating that the trial was likely to take time. Continued incarceration, in such circumstances, would not serve the ends of justice. Importantly, the Court examined the status report and noted that the main beneficiary of the alleged fraudulent ITC appeared to be MBook Technology (now Metal Book Technologies Pvt. Ltd.), with Mr. Pulkit Baldev and Mr. Aman Tibrewal being at its helm. This observation diluted the prosecution’s assertion that the petitioner was a principal beneficiary or kingpin of the alleged fraud.
Relying on the Supreme Court’s reasoning in Vineet Jain v. Union of India, the High Court reiterated that in cases of GST fraud, arrest and prolonged detention should not be mechanical, and bail should ordinarily be granted unless there are exceptional circumstances such as repeated offences, likelihood of absconding, or clear attempts to derail the investigation. The Court found that none of these exceptional circumstances were present in the petitioner’s case.
The Court also noted that the evidence in the case was largely documentary in nature and already in the possession of the investigating agency, thereby reducing the risk of tampering. Balancing the seriousness of the allegations with the fundamental right to personal liberty under Article 21 of the Constitution, the Court held that continued custody of the petitioner was not justified.
Accordingly, the Delhi High Court granted regular bail to the petitioner on furnishing a personal bond of ₹5,00,000 with two sureties of the like amount, subject to stringent conditions. These conditions included restrictions on leaving the country without court permission, mandatory appearance before the trial court as and when required, informing the court or investigating officer of any change in address, providing and maintaining an active mobile number, and a clear prohibition against tampering with evidence or influencing witnesses. The Court clarified that any violation of these conditions would entitle the prosecution to seek cancellation of bail.