Allahabad High Court rejects anticipatory bail in alleged ₹186.62-crore GST and excise evasion probe

The applicant sought anticipatory bail in a DGGI investigation alleging clandestine manufacture and clearance of pan masala, zarda-scented tobacco and desi dohra, with alleged revenue evasion exceeding ₹186.62 crore.

Searches across seven premises reportedly resulted in seizure of 27 undeclared pouch-packing machines and other materials; co-accused Manish Kumar was arrested, while the applicant had been summoned repeatedly under Section 70 of the CGST Act.

The applicant argued that no individualized role or benefit had been attributed to him and undertook to cooperate; the Union opposed relief, contending that no arrest authorization had been issued and that further interrogation might be necessary.

1. Whether an anticipatory bail application based on repeated summons under Section 70 of the CGST Act is premature in the absence of an arrest order under Section 69.

2. Whether, on the facts and investigative circumstances, the applicant had established grounds for anticipatory bail.

Section 69 of the CGST Act empowers the Commissioner, on the requisite reasons to believe, to authorize arrest; Section 70 empowers the proper officer to summon a person whose attendance is considered necessary for an inquiry.

A summons alone does not establish that an arrest order exists, but anticipatory bail jurisdiction may be invoked where there is a real, reasonable and fact-based apprehension of arrest; apprehension is necessary but does not itself entitle an applicant to relief.

The Court referred to Radhika Agarwal v. Union of India, (2025) 6 SCC 545, for the proposition that a person summoned under Section 70 does not, merely by being summoned, become an accused entitled to Article 20(3) protection.

It also cited C.B.I. v. Anil Sharma, (1997) 7 SCC 187, on the potential investigative value of custodial interrogation, while recognizing that such interrogation must be justified by the circumstances of the particular investigation.

The Court’s assessment was guided by the nature and gravity of the allegations, the applicant’s attributed role, the stage and needs of the investigation, possible interference with evidence or witnesses, and the need for custodial interrogation.

The Court rejected the contention that the application was premature solely because no formal arrest order had been produced: the searches, alleged scale of evasion, arrest of a connected co-accused and circumstances of the investigation made the applicant’s apprehension more than fanciful.

However, maintainability did not determine entitlement to bail. The alleged operation involved several unresolved investigative strands, including machinery, raw-material procurement, manufacturing, clearances, recipients and financial, documentary and electronic records.

The Department also alleged that the applicant had failed to cooperate despite repeated summons.

Although the applicant’s undertaking to cooperate was relevant, the Court held that it did not foreclose interrogation or establish a right to pre-arrest protection; in light of the alleged scale and complexity of the investigation, further interrogation could not be ruled out.

The application was rejected, with the Court clarifying that its observations were confined to the bail application and did not express an opinion on the merits or the applicant’s guilt.