Anticipatory bail in alleged GST evasion refused where dummy entities, tax loss, and weak co-operation justified continued investigation

Anticipatory bail in an alleged GST evasion case was refused because the investigation disclosed a prima facie conspiracy involving dummy entities, inadmissible input tax credit, and significant tax loss. The court treated the applicant's limited co-operation during investigation as relevant against pre-arrest protection and held that the possibility of compounding did not outweigh the need for a full inquiry. It also rejected parity with regular bail because anticipatory bail and regular bail are governed by different considerations. On that basis, pre-arrest bail was declined.

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Issues: Whether anticipatory bail should be granted in a case involving alleged GST fraud and tax evasion during ongoing investigation.

Analysis: The application arose from summons issued under the Central Goods and Services Tax Act, 2017 in connection with alleged creation of dummy firms, availing of inadmissible input tax credit, and evasion of tax. The record indicated a prima facie chain of transactions involving non-existent or fabricated entities, substantial alleged loss to the public exchequer, and insufficient co-operation during investigation. The plea for parity was rejected because anticipatory bail and regular bail stand on different considerations. The fact that the offence may be compoundable did not outweigh the need for thorough investigation, particularly where the applicant had not shown readiness to make good the alleged tax evasion.

Conclusion: Anticipatory bail was rightly refused.

Ratio Decidendi: In matters of alleged GST evasion, anticipatory bail may be refused where the investigation discloses a prima facie conspiracy involving dummy entities, substantial tax loss, and lack of meaningful co-operation, and parity with regular bail does not by itself justify pre-arrest protection.

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