2026-VIL-718-TEL
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SGST High Court Cases

GST – Application for Anticipatory bail - Fraudulent availment of Input Tax Credit - Necessity of Custodial Interrogation - Petitioners were partners of partnership firm engaged in business of supplying stainless steel products and ferrous scrap - DGGI initiated investigation alleging wrongful availment of ITC and estimated at approximately Rs. 94.96 crores by claiming credit on invoices without actual receipt of goods and from fake or non-existent suppliers - Petitioners apprehending arrest and seeking anticipatory bail - Whether arrest can be effected as matter of course in economic offences involving large-scale GST evasion or whether necessity of custodial interrogation must be independently established by investigating agency - HELD – The power of arrest under Section 69 of CGST Act is neither mechanical nor automatic and can be exercised only where Commissioner has reasons to believe person has committed specified offence and expression reasons to believe embodies substantive statutory safeguard requiring objective satisfaction founded on tangible material and not mere suspicion or allegations - Arrest is investigative measure and not punitive one and mere existence of power to arrest does not justify its exercise. Arrest must be shown to be necessary for purposes of investigation such as preventing abscondence, tampering with evidence, influencing witnesses or obstructing course of justice - Gravity of allegation by itself cannot justify curtailment of personal liberty. While economic offences constitute distinct class warranting fair thorough and effective investigation, constitutional safeguards protecting personal liberty cannot be ignored - In present case investigation substantially centres around documentary financial and electronic records already in custody of authorities and petitioners being permanent residents with known identities and addresses have expressed willingness to cooperate and undertaken to appear before investigating authority whenever required - Custodial interrogation not indispensable at this stage where investigation can effectively proceed without depriving accused of personal liberty – The petitioners are granted anticipatory bail subject to stringent conditions - The Criminal Petition is allowed
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