Fraudulent input tax credit allegations justified refusal of anticipatory bail where custodial interrogation was needed.

Prima facie material of fraudulent input tax credit under the GST regime justified refusal of anticipatory bail. The Court relied on search proceedings, summons, statements attributed to the applicant, and investigative material suggesting invoicing without corresponding movement of goods and without payment to some suppliers. Although the applicant retracted statements and claimed the transactions were genuine and documentary in nature, the Court accepted the prosecution case that custodial interrogation was necessary for effective inquiry into the alleged GST fraud. Anticipatory bail was therefore declined.

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Issues: Whether the applicant was entitled to anticipatory bail in connection with alleged fraudulent availment and passing of input tax credit under the GST regime.

Analysis: The application arose from investigation into alleged ineligible input tax credit routed through entities said to be non-existent. The record referred to search proceedings, summons, statements attributed to the applicant, and material suggesting invoicing without corresponding movement of goods and without payment to some suppliers. The applicant relied on retraction of statements and asserted that the transactions were genuine and documentary in nature. The Court noted the seriousness of the allegations, the material gathered during investigation, and the prosecution case that custodial interrogation was required for effective inquiry into the alleged GST fraud.

Conclusion: The applicant did not make out a case for anticipatory bail and the relief was refused.

Ratio Decidendi: Where the investigation discloses prima facie material of fraudulent input tax credit and custodial interrogation is considered necessary, anticipatory bail may be declined.

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