In what legally permissible circumstances can be Letter of Credit be allowed to be avoided by the Issuing Bank after acceptance by the accepting bank?

The Basic situation in which courts will interfere or arbitral authorities will pass interim orders would be egregious fraud in the underlying transaction and this has to be proved by the material on record.  U.S., Anglo Saxon and European law has developed in this direction and that is the only circumstances that a letter of credit or Bank Guarantee can be avoided.  A body of case law has developed around this subject and it is illustrative of circumstances in which it can be done.

Simply if the documents presented are not performed or met in accordance with the specified terms and conditions of the letter of credit, the issuing bank is no longer obligated to pay in such case or in case of discovered falsified or forged documents.

Receipt of good without payment  and payment after stipulated time as per mutal aggreement.  simply credit purchase.

Issuing bank is primary source of payment even after establishing the Letter of Credit.  Letter of Credit is not a credit document to release the payment but to ensure the availability of the credit subject to establishing a performance duly accepted and endorsed by the beneficiary.  In case, there is some sort of doubt or any other default in terms of performance, the payment which is to be routed through Letter of Credit can still be avoided by the Issuing Bank subject to having concurrence of the Applicant.

in the event of the documents presented under the letter of credit turns out to be forged and/or commission of fraud by the beneficiary which can be proved in a court of law, the issuing bank can avoid the letter of credit even after acceptance by the accepting bank.