Anticipatory bail refused in alleged fake GST invoice case, with the Court treating the conduct as a serious economic offence.

Anticipatory bail was declined in a GST prosecution involving alleged fake input tax credit, paper invoices, bogus transportation and a suspected chain of shell firms. The Court treated the allegations as a serious economic offence causing grave loss to the exchequer and found that the applicants' asserted limited role did not outweigh the material then on record. It also held that pending adjudication proceedings were not a prerequisite for action on the alleged offence, and that partial deposit of the alleged liability did not justify pre-arrest protection. The application was rejected against both applicants.

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Issues: Whether anticipatory bail should be granted to the applicants accused of involvement in alleged fake input tax credit and issuance of paper invoices under the GST regime.

Analysis: The applicants were shown to be directors of the company and the material placed before the Court indicated a suspected chain of paper firms, bogus invoices and non-existent transportation, leading to alleged wrongful availment of input tax credit. The Court held that the applicants' claimed limited role and the fact that part of the alleged liability had been deposited could not, at this stage, outweigh the seriousness of the allegations. It was further held that adjudication proceedings were not a prerequisite for action in respect of the alleged offence and that the alleged conduct caused grave economic loss to the exchequer.

Conclusion: Anticipatory bail was declined and the application was rejected against both applicants.

Final Conclusion: The Court treated the allegations as a serious economic offence involving fake GST invoices and held that the circumstances did not justify pre-arrest protection.

Ratio Decidendi: Allegations of deliberate fake input tax credit and paper invoice transactions constituting a serious economic offence may justify refusal of anticipatory bail even where part payment has been made and adjudication is pending.

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