Anticipatory bail in GST input tax credit dispute upheld where documentary records were already available and custody was unnecessary.

Anticipatory bail was granted to directors of a GST-registered company accused of offences arising from alleged input tax credit mismatch and disallowance, because the dispute was document-driven and the relevant invoices, returns and books were already before the department. The notice had not resulted in final adjudication, a substantial amount had been deposited, and the Court found no material need for custodial interrogation. It treated arrest under the GST law as requiring a genuine and rational basis and applied the safeguards governing arrest in less serious offences to GST proceedings, particularly where the alleged punishment did not exceed five years.

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Issues: Whether anticipatory bail should be granted to directors of a GST-registered company accused of offences under the GST law, and whether custodial interrogation was necessary in the absence of final adjudication and where the alleged liability arose from documentary scrutiny of input tax credit.

Analysis: The allegations stemmed from mismatch and disallowance of input tax credit reflected in departmental records, with the relevant invoices, returns and books already available to the investigating authority. The notice had not culminated in final adjudication, and a substantial amount had already been deposited, indicating cooperation. The arrest power under the GST law was treated as requiring a genuine and rational basis, and the safeguards governing arrest in less serious offences were held relevant to GST proceedings as well. In the circumstances, the Court found no material necessity for custodial interrogation, particularly where the matter was essentially document-driven and the maximum punishment alleged did not exceed five years.

Conclusion: Anticipatory bail was granted, and the applicants were protected from arrest on conditions.

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