Fraudulent input tax credit allegations justify denial of bail where the accused is the principal participant and investigation remains incomplete.

Bail was refused in an alleged GST fraud involving circular trading and fraudulent input tax credit, as the accused was treated as the principal participant in non-genuine transactions supported by invoices without actual supply. The court noted his lack of cooperation, failure to produce relevant documents, and inability to facilitate the investigation, which weighed against release. Parity was rejected because his role was distinguished from that of co-accused. The plea that prior notice and adjudication were required before arrest was also declined, the court treating the alleged conduct as a grave economic offence involving substantial inadmissible ITC.

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Issues: Whether bail ought to be granted in a case alleging large-scale fraudulent passing on and availment of input tax credit through circular trading, despite the plea of parity and reliance on pre-arrest notice principles.

Analysis: The allegations disclosed a planned GST fraud involving companies controlled by the accused, non-genuine transactions, invoices without actual supply, and substantial inadmissible ITC. The accused was found not to have cooperated with investigation, not to have produced relevant documents, and not to have facilitated completion of the inquiry. The plea of parity was declined because the accused was treated as the main offender and his role was distinguished from the co-accused. The contention that prior notice and adjudication were mandatory before arrest was not accepted in view of the seriousness of fraudulent ITC claims and the distinction drawn between ordinary revenue evasion and offences creating a huge liability for the State.

Conclusion: Bail was refused.

Ratio Decidendi: In grave economic offences involving alleged fraudulent input tax credit, bail may be declined where the accused is shown to be a principal participant, has not cooperated with the investigation, and the circumstances do not justify parity or insistence on prior notice as a precondition to arrest.

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