CGST arrest standard: reason to believe from investigation material is enough; bail was rejected for non-cooperation and custodial need.

In a prosecution under the CGST Act, arrest under Section 69(1) does not require final adjudication of tax liability; sufficient material to form a reason to believe that an offence under Section 132(1) has been committed is enough. On the investigation record, alleged suppression of taxable turnover was supported by search material, electronic records, transport documents, employee statements, and the petitioner's statement and retraction, while non-cooperation with summons justified custodial interrogation. Bail was therefore rejected.

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Issues: Whether the petitioner was entitled to bail in a prosecution under the Central Goods and Services Tax Act, 2017, and whether the arrest and custodial interrogation were justified on the materials collected during investigation.

Analysis: The allegations related to large-scale suppression of taxable turnover through the margin scheme and resale of melted gold as Gatti gold, supported by search material, electronic records, transport documents, statements of employees, and the petitioner's own statement followed by retraction. The Court held that, at the stage of authorising arrest under Section 69(1) of the Central Goods and Services Tax Act, 2017, final adjudication of tax liability was not required; what was required was sufficient material to form a reason to believe that an offence under Section 132(1) of the Central Goods and Services Tax Act, 2017 had been committed. The Court further found that the petitioner had not cooperated with summons and that custodial interrogation was necessary in view of the conduct reflected in the investigation materials.

Conclusion: Bail was not warranted and the petition was rejected.

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