Anticipatory bail in alleged GST fraud may be refused where fake input tax credit and custodial interrogation concerns dominate.

Anticipatory bail in alleged GST fraud may be refused where the record shows creation of a fictitious firm, fraudulent input tax credit claims, non-existent business premises, doubtful supply chains and suspected fund rotation without real commercial activity. The text states that, at an early stage of investigation and in the absence of full cooperation, the need for effective inquiry and possible custodial interrogation can outweigh the request for pre-arrest bail, so the petition fails.

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Issues: Whether pre-arrest bail should be granted in a case involving allegations of creation of a fictitious firm, fraudulent availing and passing on of input tax credit, and non-cooperation with the investigation.

Analysis: The allegations disclosed a serious GST fraud involving large-scale fake ITC, non-existent business premises, doubtful inward and outward supply chains, incorrect bank details, and suspected rotation of funds without actual commercial activity. The investigation was at a nascent stage and the material placed on record indicated that the petitioner had not fully cooperated with the inquiry. In these circumstances, the need for effective investigation, including the possibility of custodial interrogation, outweighed the claim for anticipatory bail.

Conclusion: Pre-arrest bail was not warranted and the petition failed.

Ratio Decidendi: Anticipatory bail may be declined where the allegations disclose a serious economic offence involving fake tax credits and fictitious transactions, the investigation is at an early stage, and custodial interrogation is considered necessary to prevent obstruction of the inquiry.

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