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 Input Tax Credit (ITC) without corresponding receipt or supply of goods or services.
Justice Sanjay Vashisth 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. The Court observed that further detention was not required for investigation and that the prosecution had failed to demonstrate why continued incarceration was necessary.
An important consideration was the issuance of Instruction No. 02/2026-GST dated October 30, 2026, by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (CBIC). The instruction, issued pursuant to 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.
The Court clarified that the instruction did not, by itself, determine the legality of Bhasin’s earlier arrest. However, it reflected a subsequent policy decision against further GST arrests and, when considered alongside the completion of investigation and filing of the complaint, weighed in favour of granting bail.
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 said order was not determinative of Bhasin’s entitlement to bail, the Court considered it a relevant circumstance.
The prosecution’s case alleged that M/s Targetone Innovations Private Limited (TIPL), M/s Parcit Autocrazy Private Limited (PAPL) and a network of 28 shell or dummy firms were involved in fraudulent ITC transactions without corresponding supply of goods or services.
The allegations were supported by statements of directors, employees and alleged dummy proprietors, WhatsApp and email evidence, and an independent forensic examination conducted by Ernst & Young LLP.
Allowing the petition under Section 483 of the BNSS, 2023, read with Section 69 of the CGST Act, the Court directed Bhasin’s release on bail, subject to furnishing bail and surety bonds to the satisfaction of the concerned trial court.
The Court 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.
