Accused in Rs 43.08 crore alleged tax evasion case allowed to remain on interim bail, but apex court condemns suppression of facts and parallel legal moves
The Supreme Court has set aside a Karnataka High Court order that had granted bail to Mohammed Kamran, an accused in a major GST fraud case involving an alleged revenue loss of over Rs 43 crore, and has directed the High Court to reconsider the matter afresh.
A Bench of Justice Dipankar Datta and Justice Sheel Nagu, in its judgment dated 16 October 2026, strongly criticised the accused for pursuing parallel remedies before different courts and for failing to disclose material facts while seeking bail. The Court said such conduct amounted to abuse of the judicial process, forum shopping, and suppression of facts.
The case arose from a complaint filed by the Senior Intelligence Officer of the Directorate General of Service Tax Intelligence before the Special Court for Economic Offences, Bengaluru. The complaint alleged that Kamran, proprietor of M/s MK Traders, issued invoices without actual supply of goods, fraudulently availed input tax credit, falsified financial records, and gave false information to evade tax under the Central Goods and Services Tax Act, 2017. The alleged loss to the public exchequer was stated to be Rs 43,08,22,936.
Kamran was arrested on 16 September 2025. His successive bail pleas before the trial court and the Sessions Court were rejected. He then moved the Karnataka High Court for bail.
The High Court first listed the bail petition on 12 December 2025 and directed the tax authority to file objections within two weeks. However, during the winter vacation, the matter was urgently listed on 26 December 2025 on the basis of a memo filed by the accused, and bail was granted.
Before the Supreme Court, the tax department argued that it had not been given a fair opportunity to oppose the bail plea. It contended that its designated Standing Counsel was unavailable, a request for adjournment had been made, and yet the matter was heard and decided in haste during the court vacation.
The Supreme Court examined affidavits, a video recording of the High Court hearing, and the transcript. It found that although a lawyer for the department was present and had made some submissions, the request for adjournment due to the absence of the Standing Counsel had indeed been made. The Bench held that it would not be correct to say the department was completely unrepresented, but it also accepted that the authority did not get full assistance from its chosen counsel.
More significantly, the Supreme Court found fault with Kamran’s conduct. It noted that while his bail petition was pending before the High Court, he had also moved the Sessions Court for bail and later filed a writ petition challenging his arrest and seeking release. In that writ petition, he claimed that a bail application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 was not an efficacious remedy. The apex court recorded that his plea for ad-interim release in the writ petition had been refused on 22 December 2025, but this rejection was not disclosed to the Single Judge who granted him bail on 26 December 2025.
Calling this a clear case of lack of “uberrima fides”, the Court said a litigant invoking the equitable and discretionary jurisdiction for bail must make full and fair disclosure of all prior proceedings and material facts. It observed that Kamran had engaged in “suppressio veri and suggestio falsi” and had attempted to secure relief by keeping courts in the dark.
The Bench said the accused’s conduct deserved “severe deprecation”. It also disapproved of the urgent listing of the bail petition during the High Court’s winter vacation without adequate notice to the complainant authority, observing that it appeared to be an attempt to “steal a march” and mislead the court.
Even so, the Supreme Court stopped short of cancelling bail outright. Taking note of the nature of the offences and the overall circumstances, it held that the proper course would be to revive the bail petition before the Karnataka High Court for fresh consideration on merits.
The Court therefore set aside the part of the High Court order by which the bail petition had been finally disposed of, restored the petition to the High Court’s file, and directed that Kamran would continue on interim bail on the same terms and conditions until the High Court passes fresh orders. The tax authority has been permitted to file its counter affidavit within two weeks, with Kamran allowed one week thereafter to file a rejoinder. The High Court has been requested to decide the matter preferably by the end of the year.
In an important procedural observation, the Supreme Court also laid down guidance on listing matters during court vacations. It said that where a High Court directs a matter to be listed “two weeks hence” and that period expires during vacation, the time should ordinarily be computed by excluding the vacation period, unless the bench specifically directs listing on a vacation date or before a Vacation Bench. The Court said this would promote uniformity and prevent prejudice to litigants.
The ruling is likely to be cited in future cases involving bail, especially where courts examine whether an accused has approached multiple forums simultaneously without proper disclosure.
Statutory provision(s): Sections 16(2)(b), 132(1)(b), 132(1)(c), 132(1)(f), 135 of the Central Goods and Services Tax Act, 2017; Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023; Article 21 of the Constitution of India; Article 226 of the Constitution of India
Senior Intelligence Officer v. Mohammed Kamran, (SC) : Law Finder Doc id # 2998706
