Karnataka HC Grants Anticipatory Bail in CGST Fake Invoice ITC Case

Venkatasubbaiah C Vs Superintendent of Central Tax (Karnataka High Court)

Summary: The Karnataka High Court considered a petition filed by Venkat subbaiah C and Smt. Guramma C, who apprehended arrest pursuant to summons issued under Section 70 of the Central Goods and Services Tax Act, 2017. The petition sought anticipatory bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023, in connection with alleged offences under Sections 69 read with 132 of the CGST Act. The summons dated 10.04.2026 concerned proceedings against M/s Sri Lakshmi Venkateshwara Enterprises.

Petitioner No. 2 was the sole proprietrix of the firm, which was engaged in recycling used lead-acid batteries and manufacturing remelted lead ingots, while petitioner No. 1, her husband, was allegedly managing its affairs. The firm had valid GST registration. The petitioners contended that they had purchased goods from various entities, paid invoice value and tax through banking channels, periodically filed returns and possessed documents supporting receipt of goods. They denied criminal antecedents and stated that they had appeared before the respondent authorities and cooperated with the investigation.

The Revenue opposed anticipatory bail, alleging that the suppliers were fictitious entities and that the petitioners had availed Input Tax Credit on bogus invoices without actual supply of goods. It was alleged that funds transferred to the suppliers were subsequently withdrawn and shared. The Revenue contended that custodial interrogation was necessary, the suppliers could not be traced and petitioner No. 1 was the mastermind.