Anticipatory bail in fraudulent Input Tax Credit circulation and custodial interrogation risk; court refused pre-arrest bail relief.

Anticipatory bail application concerned alleged management of multiple firms issuing fictitious invoices to circulate ineligible Input Tax Credit and potential tampering with evidence; court relied on nascent stage inquiry, lack of cooperation by the accused, and substantial risk to the government exchequer to refuse pre-arrest bail and dismiss the petition. The court emphasised risk of misuse of pre-arrest relief to evade custodial interrogation, manipulate records, influence witnesses, and delay investigation, and noted that its observations are limited to determination of this petition.

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Issues: Whether anticipatory bail should be granted to the petitioner accused of involvement in fraudulent availment and circulation of ineligible Input Tax Credit under the GST laws.

Analysis: The allegations include management/control of two firms, creation of fictitious registrants and issuance of fabricated invoices resulting in large-scale wrongful availment and pass-through of ITC amounting to several crores. Investigation material alleges non-existent entities, mismatch between GSTR-3B and GSTR-2B/ledger entries, forensic evidence linking circulation of fabricated invoices, and non-cooperation by the petitioner. The inquiry is at a nascent stage and custodial interrogation is asserted to be necessary to prevent tampering with evidence, influencing persons aware of transactions and to enable effective investigation into alleged offences punishable under provisions of the GST statutes.

Conclusion: Anticipatory bail is refused; the petition for pre-arrest bail is dismissed (decision adverse to the petitioner and favourable to the Revenue).

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