The Hon’ble Karnataka High Court in Venkatasubbaiah C & Anr. v. Superintendent of Central Tax & Anr. [Criminal Petition No. 9023 of 2026 dated August 12, 2026] granted anticipatory bail to the Petitioners who were apprehending arrest under Section 69 read with Section 132 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) on the allegation of having availed Input Tax Credit (“ITC”) on invoices issued by fictitious suppliers without actual supply of goods, and held that cancellation of the supplier’s GST registration or closure of the supplier’s business subsequent to the supply does not, by itself, disentitle the purchaser from claiming ITC or establish that the purchaser has availed ITC on fraudulent invoices, unless the Department prima facie proves collusion between the supplier and the purchaser. The Court further held that custodial interrogation is not warranted merely because the allegation is of an economic offence, particularly where the accused has no criminal antecedents, has joined the investigation and has undertaken to cooperate.
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