The Punjab and Haryana High Court has granted regular bail to Amit Bhasin, co-founder and director of GoMechanic, in a case involving allegations of fraudulent availment, utilisation and passing on of Goods and Services Tax (GST) input tax credit (ITC) without any corresponding receipt or supply of goods or services. The case is titled Amit Bhasin v. CGST Commissionerate, Gurugram.

Source: Live Law

Justice Sanjay Vashisth allowed the petition under Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, read with Section 69 of the Central GST Act, and directed Bhasin's release on bail subject to furnishing bail and surety bonds to the satisfaction of the trial court, if he is not required in any other case.

Source: The Bar Bulletin

The prosecution has alleged that Targetone Innovations Private Limited (TIPL) and Parcit Autocrazy Private Limited (PAPL), along with a network of 28 shell or dummy firms, were involved in fraudulent ITC transactions without corresponding supply of goods or services. It has alleged that Bhasin, a co-founder and director of TIPL, directed the creation and operation of these entities along with other directors. According to the reports, the allegations rest on statements of directors, employees and alleged dummy proprietors, WhatsApp and email evidence, and an independent forensic examination by Ernst & Young LLP. These are allegations, and they have not been proven in court.

The court took note of the fact that the investigation against Bhasin had been completed and the complaint had already been filed before the competent court on September 22, 2026. It observed that further detention was not required for investigation, that the prosecution had failed to demonstrate why continued incarceration was necessary, and that the maximum punishment prescribed for the alleged offences is five years.

CBIC no-arrest direction weighed with the court

An important consideration was CBIC Instruction No. 02/2026-GST dated October 30, 2026, issued by the Central Board of Indirect Taxes and Customs under the Ministry of Finance. The instruction, issued following the GST Council's recommendation to withdraw arrest powers under GST by omitting Section 69 of the CGST Act, directed all CGST field formations that no further arrests may be carried out under GST.

Justice Vashisth clarified that the instruction did not, by itself, determine the legality of Bhasin's earlier arrest. However, the court held that it reflected a subsequent policy decision of the department against effecting further arrests under GST and, when considered along with the completion of the investigation, the filing of the complaint, the absence of any demonstrated requirement of further custodial interrogation and the bail granted to a co-accused, it weighed in favour of the petitioner.

The court also noted that co-accused Sahil Chandna had already been granted bail by a coordinate Bench after his arrest was declared illegal, while clarifying that the order was not determinative of Bhasin's entitlement to bail. Bhasin's counsel, Senior Advocates Randeep S. Rai and Rahul Sharma, had argued that his arrest was illegal because the reasons necessitating it were recorded by an Inspector or Investigating Officer rather than the GST Commissioner, and placed reliance on the Supreme Court's judgment in Radhika Agarwal v. Union of India. Senior Standing Counsel Neha Awasthi appeared for the GST Department, which opposed bail.

Granting bail, the court observed that, in the totality of the circumstances, continued detention of the petitioner inside jail would not serve any useful purpose. It clarified that its observations would not be construed as an expression of opinion on the merits of the case and that the trial court must independently assess the evidence.