Gurgaon: A man, who was accused of a fraud worth Rs 190 crore, was acquitted, as a city court held that no prima facie case had been made out to frame charges. The court on Tuesday held that the directorate general of GST intelligence (DGGI) failed to produce evidence establishing the alleged role of Md Shamsad Saifi in a racket — six years after he was arrested. Saifi was accused of facilitating fraudulent input tax credit (ITC) through fake firms.Additional chief judicial magistrate Manish Kumar said the prosecution’s sole witness lacked personal knowledge of crucial facts, while documents and other witnesses that could have substantiated the allegations were never brought on record under Central Goods and Services Tax Act, 2017. The complaint, filed by DGGI’s zonal unit in the city, alleged that Saifi was instrumental in creating and operating fake or non-existent firms — including Techno Electrical & Sales and Lata Sales — to issue invoices without actual supplies of goods or services and fraudulently pass on ITC of approximately Rs 190 crore to various entities. The alleged offences fell under Section 132(1)(b) and (c) of the CGST Act, read with Section 20 of Integrated Goods and Services Tax Act.Saifi was arrested on Oct 9, 2020, under Section 69 of CGST Act. The complaint was instituted in May 2023 and the matter later reached the stage of pre-charge evidence. The court noted that the department’s only examined witness, senior intelligence officer Ramashish Sharma, admitted during cross-examination that he did not know the actual amount of allegedly fraudulent ITC involved. He also acknowledged that he was not part of the team that conducted searches at the accused’s premises or those of the alleged fake firms.Although DGGI had cited six witnesses, including officers associated with the investigation and searches, none of the other five was examined. The court also found that documents such as panchnamas, statements, bank records, invoices and GST returns had not been proved. The only exhibited document was the authorisation permitting Sharma to file the complaint.The court said the witness’s awareness based on office information, unsupported by proved material, could not establish a prima facie case in a serious economic offence. It also noted that alleged statements, the recovery of documents, the purported sale of firms and the alleged method of returning consideration after RTGS or cheque payments remained unproved.The court had closed the complainant’s pre-charge evidence on Oct 13, 2025, after more than 20 opportunities between May 2023 and Oct 2025 failed to bring the evidence to a conclusion. DGGI challenged that order in a criminal revision, but no stay had been granted. The department was also unrepresented on Oct 12 and Oct 16 and on the date of the order. The court said its repeated absence indicated a lack of seriousness in pursuing the complaint and that, without a stay, it was required to decide the matter on the existing record.Saifi was represented by advocate Maman Yadav. The order records that the defence counsel was heard, but does not detail specific defence submissions. No prosecution counsel appeared to advance arguments at the final hearing. The court discharged Saifi from the offences alleged in the complaint and ordered that his bail bonds, if any, stand discharged.
