Order dated 28 July 2025 
Parties: Mahit Kumar  v. Directorate General, Goods & Service Tax Intelligence, Zonal Unit, Ludhiana 

Facts -

• The petitioner, accused of using fake firms for availing and passing on fake input tax credit (ITC) under the GST regime, apprehended arrest under Sections 132(1)(b) and 132(1)(c) of the CGST Act. The total alleged tax evasion exceeded ₹5 crores. 
• The petitioner claimed that all necessary documents were submitted, and custodial interrogation was unnecessary. The prosecution opposed the bail, alleging fraudulent activities and potential non-cooperation.

Issue –

• Whether anticipatory bail should be granted in a GST evasion case where custodial interrogation is not necessary and the investigation is largely document-based?

Order -

• The single bench of the Hon’ble high court held that if the same is for want of sufficient material to satisfy the standards for grant of authorisation under Section 69 of CGST Act, the respondent must explain the delay in investigation as well efficacy thereof. 
• Additionally, while the possibility of evidence tampering has been flagged, the entire case is based on documentary and electronic evidence, which are already available with the investigating agency, and all of the prosecution witnesses are officials of the respondent. As such, there is no scope of tampering with the evidence or influencing the witnesses. 
• In that vein, this Court finds it against objective standards of reason and justice to deny bail to those accused against whom final report has been presented merely on the ground that the investigation is under progress qua a co-accused. Nothing has been brought to the fore to suggest that the release of the petitioners would derail the investigation; therefore, this cannot be used as a reason to keep them under custody indefinitely.