Mumbai: An Additional Sessions Judge, R. M. Sadrani (C.R. No.37), has granted bail to Sachin Kankrai Mehta, 44, accused in a case involving alleged fake Input Tax Credit (ITC) under the Central Goods and Services Tax (CGST) Act. The order, issued on April 22, 2022, allows Mehta’s release on a PR bond of Rs. 50,000/- with one or more sureties of the same amount, along with a cash surety of Rs. 50,000/-.

Mehta, a businessman residing in Malad (W), Mumbai, was arrested in connection with File No. GEXCOM/AE/FU/672/2021-AE-O/0 COMMR. CGST-BWD-NS PHARMA, registered by the Superintendent of CGST & C, Bhiwandi Commissionerate, for offenses under Section 132 of the CGST Act.

Prosecution’s Allegations

According to the respondent (CGST & C), Sachin Kankrai Mehta is the proprietor of M/s. N.S. Pharma Chem and M/s. Neon Pharma Chem. He is accused of availing fake ITC totaling Rs. 10,34,82,662/- from these two firms without valid documents or movement of goods, in violation of Section 16 of the CGST Act. The prosecution claimed that Rs. 5,83,63,894/- of this fake ITC was availed from non-existing/fake/dummy firms.

Applicant’s Defense

Advocate Jain, representing Mehta, argued that his client cooperated with the authorities after receiving a summons on March 9, 2022. Mehta specifically stated that a Mr. Naitik Mewani approached him to open these firms, and relying on Mewani’s words, he provided his personal details (PAN, Aadhaar, mobile number). Mehta claimed he received Rs. 20,000/- per month from Mewani, who managed all activities of both firms. He informed the respondent that he possessed no documents related to the firms, as all were with Naitik Mewani.

Mr. Jain further highlighted that Naitik Mewani’s anticipatory bail application was rejected by the Sessions Court and the Hon’ble High Court, but he had received interim protection from the Hon’ble Supreme Court in a Special Leave Petition. He pointed out that in those proceedings, the respondent’s consistent stand was that Paresh Mewani and Naitik Mewani were operating 17 fake firms, including the two in Mehta’s name, and had collectively availed over Rs. 300 crores in fake ITC. This, Mr. Jain argued, supports the applicant’s claim that he was not the actual beneficiary of the ITC, but rather an abettor, making the offense bailable under Section 132(L)(i) read with Section 132(4)(5) of the CGST Act. He requested bail on any reasonable terms and conditions.

Prosecution’s Opposition

SPP Pathak, for the respondent No.1 (CGST & C), opposed the application, arguing that Mehta actively caused the commission of the offense and helped the Mewanis retain benefits, indicating his active involvement. He stressed the serious nature of the offense and stated that the investigation was still in progress, necessitating continued custody.

Court’s Rationale and Decision

After hearing both sides, Judge R. M. Sadrani reviewed the record. The court noted that the respondent’s own submissions in the Mewani cases supported the applicant’s contention that the Mewanis were operating the 17 fake firms and that Mehta’s firms were part of this larger operation. The court acknowledged Mehta’s consistent stand that he was merely receiving Rs. 20,000/- per month and was unaware of the firms’ business, as it was handled by the Mewanis.

The court found “nothing is pointed out that if the applicant is released on bail, there is possibility of tampering with the evidence.” Consequently, the court was inclined to grant bail.

Bail Conditions

Accordingly, Bail Application No. 661 of 2022 was allowed. Sachin Kankrai Mehta is to be released on bail subject to the following conditions:

• He must execute a PR bond of Rs. 50,000/- with one or more sureties of the same amount.
• He must also deposit a cash surety of Rs. 50,000/-.
• He must furnish his detailed address and phone number at the time of furnishing bail.
• The bail is to be furnished before the Court attending remand.
• He must attend the office of the respondent No.1 every Monday between 11:00 a.m. to 2:00 p.m. until the charge-sheet is filed.
• He shall not, directly or indirectly, induce, threaten, or promise any person acquainted with the facts of the accusation to dissuade them from disclosing such facts to the Court or any police officer.
• He shall not leave India without the previous permission of the Court.

The Bail Application stands disposed of. The order was signed and uploaded on April 22, 2022.