GST Scam: Gujarat High Court Grants Bail To Journalist; No Material Evidence Of Money Laundering Found

The Gujarat High Court has granted bail to journalist Mahesh Langa in a goods and service tax GST-related fraud case. Langa was accused of forgery and cheating through the fraudulent use of input tax credit (ITC). He was arrested in October 2024 following a complaint filed by the Directorate General of Goods and Services Tax Intelligence (DGGI), Ahmedabad. The complaint alleged that over 220 benami firms were fraudulently created and used for forged ITC through fake bills and documents. These firms, according to the authorities, did not exist at their registered addresses and were created solely for the purpose of obtaining GST registration.

The alleged fraud caused a significant loss to the state exchequer, leading to Langa's arrest.

In October 2024, the Additional Chief Judicial Magistrate denied bail, citing Langa's active involvement in the fraudulent activities and his attempts to evade income tax and GST. However, the High Court has now granted him bail, with the condition of furnishing a bail bond of Rs 10,000 and one surety of the same amount. The court clarified that Langa should be released ‘only if he is not required in connection with any other offence for the time being".

While granting bail, the High Court observed: " In the facts and circumstances of the case and considering the nature of the allegations made against the applicant in the FIR, without discussing the evidence in detail, prima facie, this Court is of the opinion that this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Hence, the present application is allowed. The applicant is ordered to be released on regular bail in connection with FIR being C.R.NO. 11191011240257 of 2024 registered with D.C.B. Police Station, Ahmedabad, on executing a personal bond of Rs10,000/- (Rupees Ten Thousand only) with one surety of the like amount to the satisfaction of the trial Court and subject to the conditions", reported Live Law.

Background:

Mahesh Langa was arrested on October 8, 2024, in connection with the GST fraud case. An FIR was registered in Ahmedabad, and he was charged under several sections, including Section 420 (Cheating and dishonestly inducing delivery of property), Section 467 (Forgery of valuable security), Section 468 (Forgery intended to cheat), Section 471 (Using as genuine a forged document or electronic record), Section 474 (Possession of forged documents with intent to use as genuine), Section 120B (Criminal conspiracy).

During the hearing, the prosecution alleged that Langa had engaged in transactions with the bogus firms and benefitted at the expense of the state exchequer. On the other hand, Langa’s counsel argued that the FIR was not maintainable and suggested that a separate mechanism under the GST Act could address such offences. The counsel also stated that Langa was willing to pay the amount allegedly availed through fraudulent ITC.

The court noted that no material evidence of money laundering was on record. Despite being granted bail in this case, Langa will remain in custody as he is implicated in three other cases in Gandhinagar and Rajkot.