Fraudulent input tax credit and anticipatory bail: bogus invoices and distinct assessment-prosecution fields defeat bailability argument

Alleged fraudulent availment of input tax credit under the CGST Act is examined at the investigation stage, where non-existent suppliers and bogus invoices are treated as indicators of inadmissible credit and possible obstruction of inquiry. The text also notes that protection from arrest may be refused where there is a real risk of interference with investigation and tampering with evidence. It further states that assessment and prosecution operate in distinct fields, so a year-wise tax computation argument does not control the offence provisions or the question of bailability.

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Issues: Whether anticipatory bail should be granted in a case involving alleged fraudulent availment of input tax credit under the Central Goods and Services Tax Act, 2017, and whether the contention that the alleged tax liability would be bailable if computed year-wise could defeat the prosecution case.

Analysis: The application arose at the investigation stage. The record indicated that the applicant's suppliers were found to be non-existent and that the alleged business activity was supported by bogus invoices and inadmissible input tax credit. The Court found a real of interference with the investigation and tampering with evidence if the applicant were protected from arrest. It also rejected the contention that computation of tax year-wise under Chapter XII could control the offence provisions under Chapter XIX. The Court treated assessment and prosecution under the Act as operating in distinct fields and held that the bailability argument did not assist the applicant.

Conclusion: Anticipatory bail was refused.

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