The Delhi High Court has granted interim protection from arrest to businessman Manshu Bansal, who is currently under investigation by the Anti-Evasion Wing of the Central Goods and Services Tax (CGST) Department. The ruling, delivered by Justice Mini Pushkarna, provides relief to the petitioner while directing him to remain actively involved in the ongoing probe concerning the alleged wrongful availment, utilization, and passing on of Input Tax Credit (ITC) through two business entities, M/s KB Infra and M/s KB Enterprises.

The court’s decision comes amid a contentious legal dispute regarding the petitioner’s cooperation with investigative authorities. While the High Court has stipulated that no coercive steps are to be taken against Mr. Bansal until the next date of hearing, the relief is strictly contingent upon his continued participation in the investigation. The matter has been scheduled for further consideration on November 26, 2026, by which time the respondent is expected to file a detailed status report addressing the allegations of non-cooperation and non-disclosure of procedural events.

Investigation and Procedural Context

The investigation into Mr. Bansal centers on suspicions of systemic manipulation of ITC claims, a significant area of focus for the CGST Anti-Evasion Wing. The department contends that the petitioner facilitated illicit financial activity through the two cited firms, leading to an investigation that has now reached the High Court following an unsuccessful attempt by the petitioner to secure relief through lower judicial forums.

In the proceedings before Justice Pushkarna, the petitioner’s legal team emphasized that Mr. Bansal has made a proactive effort to demonstrate good faith, most notably by depositing a sum of ₹99,00,000. Counsel for the petitioner argued that this payment signifies a willingness to cooperate with the authorities and an acknowledgment of the gravity of the ongoing inquiry. Furthermore, the petitioner’s counsel highlighted a shift in the regulatory landscape, specifically referencing a press release related to the 57th GST Council meeting, which discussed potential revisions to arrest provisions under the Central Goods and Services Tax Act, 2017.

The defense also relied upon the Supreme Court’s judgment in Radhika Agarwal Versus Union of India and Others , which underscores the judiciary’s recognition of the right to seek anticipatory bail in matters pertaining to the CGST Act. By invoking this precedent, the petitioner sought to establish that the legal framework surrounding GST investigations does not preclude the standard application of bail provisions when individuals face potential custodial interrogation.

Contention of the CGST Department

The CGST Department, represented by its legal counsel, expressed strong opposition to the grant of interim protection. A primary contention raised by the respondent was the alleged lack of transparency by the petitioner. The Department informed the court that subsequent to the decision rendered by the Trial Court, fresh summons were issued to Mr. Bansal on October 8, 2026. The respondent asserted that these summons were not disclosed to the court by the petitioner, and further alleged that Mr. Bansal has failed to cooperate with investigators at critical junctures of the probe.

The Department’s stance serves as a reminder of the procedural hurdles often encountered in white-collar tax investigations, where the balance between investigative powers and individual liberty is frequently contested. The respondent’s argument highlighted that, notwithstanding any payments made by the petitioner, the failure to honor summons or provide necessary documentation creates an obstruction to justice that the court must take into account when evaluating a request for pre-arrest bail.

The Court’s Directive

Justice Pushkarna, acknowledging the complexity of the arguments presented by both sides, opted for a cautious approach that balances the petitioner’s request for protection with the state’s duty to conduct a thorough financial investigation. The court explicitly noted that the interim protection is conditioned upon the petitioner’s active engagement with the investigating officers.

The order states, "Subject to the petitioner joining the investigation, no coercive steps shall be taken against the petitioner, till the next date of hearing." By requiring the petitioner to join the investigation, the court effectively ensured that the department’s ability to gather evidence remains unhindered, while simultaneously providing the accused with a mechanism to avoid potential custodial detention while the substantive legal arguments are fully ventilated in future hearings.

The court also allowed an application for the exemption of filing certified copies of certain annexures, provided that they are submitted within a period of four weeks. This procedural concession, while routine, allows the legal counsel to focus on the core arguments regarding the merits of the anticipatory bail application.

Future Developments

As the matter progresses toward the November hearing, both parties are preparing for a more rigorous examination of the facts. The respondent is tasked with preparing a comprehensive reply that will likely detail the specific instances of non-cooperation and the evidentiary basis for the current investigation into M/s KB Infra and M/s KB Enterprises.

For the petitioner, the coming weeks represent a critical window to demonstrate full compliance with the investigating officers. The efficacy of his legal strategy, heavily predicated on his recent financial deposit and adherence to judicial precedents regarding bail in tax matters, will be tested against the Department’s claims of obstruction. The outcome of the hearing on November 26, 2026, will likely determine whether the interim protection remains in force or if further conditions are imposed on Mr. Bansal as the investigative net widens.

The case underscores the increasing intersection of constitutional bail protections and administrative tax enforcement in India, serving as a bellwether for how courts will continue to treat arrests in the context of the CGST Act in the coming months. All eyes will be on the next status report, which is expected to clarify whether the ongoing investigation has yielded substantial progress that necessitates a change in the legal status of the petitioner.