CGST arrest requires credible material linking accused to company control; bail granted where such basis was lacking.

Coercive arrest under the CGST framework requires credible material showing reasons to believe and a legally supportable link between the accused and the company's conduct of business. The Court found no documentary material establishing that the applicants were in charge of, or responsible for, the company's day-to-day affairs; an employee's statement alone was insufficient, and the applicants had resigned as directors long earlier. On that limited record, the arresting action was not adequately justified and bail was granted, with release ordered on bonds and stated conditions, without any finding on the merits of the alleged tax offence.

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Issues: (i) Whether the arrest of the applicants under the CGST regime was supported by material showing reasons to believe and by a legally sustainable basis for fastening responsibility on them for the company's alleged tax evasion; (ii) Whether the applicants were entitled to bail in the facts of the case.

Issue (i): Whether the arrest of the applicants under the CGST regime was supported by material showing reasons to believe and by a legally sustainable basis for fastening responsibility on them for the company's alleged tax evasion.

Analysis: The record did not disclose documentary material showing that the applicants were in charge of and responsible for the day-to-day affairs of the company. The only material referred to was the statement of an employee, which was insufficient to establish the applicants' role in the alleged offence. The applicants had also resigned from the company's directorship long ago. On this material, the basis for invoking the coercive power of arrest was not satisfactorily shown.

Conclusion: The arresting action was not supported by adequate material against the applicants and the issue was answered in favour of the applicants.

Issue (ii): Whether the applicants were entitled to bail in the facts of the case.

Analysis: The allegations were serious, but the Court found that the existing material was limited and that the applicants had shown a case for release on bail. The Court also considered the surrounding circumstances, including the nature of the prosecution material and the applicants' medical and personal circumstances, without entering into the merits of the allegations.

Conclusion: Bail was granted to the applicants.

Final Conclusion: The applicants were directed to be released from custody on furnishing bonds and complying with the stated conditions, and the application was allowed without any finding on the merits of the alleged tax offence.

Ratio Decidendi: Coercive arrest under the CGST framework must rest on credible material showing reasons to believe and a legally supportable connection between the accused and the company's conduct of business; absent such material, bail may be granted.

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