Abdul Majid Vs Assistant Commissioner of Commercial Taxes (Karnataka High Court)
The Karnataka High Court allowed three petitions seeking anticipatory bail filed by the proprietors of M/s. ANZ Traders, M/s. ZMS Enterprises and M/s. AF Trading, who apprehended arrest pursuant to summons issued under Section 70 of the Central Goods & Services Tax Act, 2017. The petitioners were registered under GST and stated that they had purchased aluminium scrap from M/s. KH E-Waste Recyclers and M/s. SKS Traders, whose proprietors had subsequently been arrested following raids by the respondent authorities. The petitioners had appeared before the authorities on 22.05.2026 and claimed to have produced documents concerning the transactions. Their earlier bail applications before the jurisdictional Sessions Court were dismissed on 19.06.2026.
The petitioners submitted that they had paid the invoice value and GST to the suppliers through banking transactions, periodically filed returns, had no antecedents and were willing to cooperate with the investigation. The prosecution alleged that the suppliers were fictitious firms issuing concocted invoices without actual supply of goods or services and that the petitioners had fraudulently availed Input Tax Credit (ITC), with the tax amounts allegedly being routed through hawala transactions. It was also submitted that the alleged ITC involved amounts of Rs.231.70 crore and Rs.567 crore in respect of the suppliers and that custodial interrogation was necessary.
