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TMI BlogCHARGE SHEET UNDER SECTION 132.X X X X Extracts X X X X X X X X Extracts X X X X ..... Dear all Plz refer Para No 38 of the Hon'ble Madras High Court judgement reported in 2019 (5) TMI 895, which reads as under: 38. Thus, determination of the excess credit by way of the procedure set out in Section 73 or 74, as the case may be is a prerequisite for the recovery thereof. Sections 73 and 74 deal with assessments and as such it is clear and unambiguous that such recovery can only be initiated once the amount of excess credit has been quantified and determined in an assessment. When recovery is made subject to determination in an assessment, the argument of the department that punishment for the offence alleged can be imposed even prior to such assessment, is clearly incorrect and amounts to putting the cart before the horse.38. Thus, determination of the excess credit by way of the procedure set out in Section 73 or 74, as the case may be is a prerequisite for the recovery thereof. Sections 73 and 74 deal with assessments and as such it is clear and unambiguous that such recovery can only be initiated once the amount of excess credit has been quantified and determined in an assessment. When recovery is made subject to determination in an assessment, the argument of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department that punishment for the offence alleged can be imposed even prior to such assessment, is clearly incorrect and amounts to putting the cart before the horse. Query: In the light of the above ruling, can a charge-sheet still be filed under Section 132[1][i] for the offences classified under Section 132[1] [b] [c] without/before determination of tax evaded under Section 74? Assuming it is filed without adjudication under Section 74, is it tenable during trial in the court of law? Experts to throw light with more case laws. - Reply By KASTURI SETHI - The Reply = Sh.Sadanand Bulbule Ji, Sir, Pl. go through the following case laws :- 2019 (25) G.S.T.L. 185 (Telangana) IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD V. Ramasubramanian and P. Keshava Rao, JJ. P.V. RAMANA REDDY Versus UNION OF INDIA Writ Petition Nos. 4764, 4769, 4892, 5074, 5130, 5329, 6952 and 7583 of 2019, decided on 18-4-2019 Arrest - Offence under Central Goods and Services Tax Act, 2017 - List of offences included Section 132(1) of Central Goods and Services Tax Act, 2017 have no co-relation to assessment - Contention that prosecution can be launched only after completion of assessment untenab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le - That offences compoundable not ground not to arrest - Offence cannot be compounded without application by accused and payment of Central Goods and Services Tax Act, 2017 - Arrested person to be produced by authorised officer before Magistrate within 24 hours - Magistrate may either remand him to judicial custody or admit the arrested person to bail - No question of police custody or custody to Proper Officer - Contention that Proper Officer not a Police Officer and could not seek custody of arrested person, not tenable - Object of arrest not only to proceed with further investigation with arrested person - Petitioners allegedly involved in circular trading with turnover on paper to the tune of about Rs. 1,289.00 crores and benefit of Input Tax Credit (ITC) to the tune of Rs. 225.00 crores - Nothing wrong in Department thinking that persons involved should be arrested - Not only Government deprived of what was due to it, but in fraudulent ITC claims, huge liability created for the Government - Acts complained of against petitioners constitute a threat to very implementation of GST law within short duration of its inception - In view of special circumstance no relief granted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners against arrest - Article 226 of Constitution of India - Sections 42 and 41A of Code of Criminal Procedure, 1973 - Sections 69, 132 and 138 of Central Goods and Services Tax Act, 2017. [paras 52, 54, 55, 56, 57, 58, 59, 60, 61] Arrest - Powers of Commissioner under Section 69 of Central Goods and Services Tax Act, 2017 - Power of arrest confined only to cognizable and non-bailable offences - However, offence specified in clauses (f) to (l) of Section 132(1) ibid are non-cognizable and bailable - Some incongruity between sub-sections (1) and (3) of Section 69 read with Section 132 of Central Goods and Services Tax Act, 2017. - It can be seen from the language employed in sub-sections (1), (2) and (3) of Section 69, that there are some incongruities. Under sub-section (1) of Section 69, the power to order arrest is available only in cases where the Commissioner has reasons to believe that a person has committed any offence specified in clauses (a) to (d) of sub-section (1) of Section 132 of CGST Act, 2017. The offences specified in clauses (a) to (d) of sub-section (1) of Section 132 of CGST Act, 2017 are made cognizable and non-bailable under Section 132(5) of the CGST Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 2017. Therefore, it is clear from sub-section (1) of Section 69 of the CGST Act that the power of the Commissioner to order the arrest of a person can be exercised only in cases where such a person is believed to have committed a cognizable and non-bailable offence. As we have pointed out elsewhere, Section 132(1) of CGST Act, 2017 lists out 12 different types of offences from clauses (a) to (l). The offences specified in clauses (a) to (d) of sub-section (1) of Section 132 are declared cognizable and non-bailable under sub-section (5) of Section 132 of CGST Act, 2017. All the other offences specified in clauses (f) to (l) of sub-section (1) of Section 132 of the CGST, 2017 Act are declared as non-cognizable and bailable under sub-section (4) of Section 132 of CGST Act, 2017. But the incongruity between Section 69(1) and sub-sections (4) and (5) of Section 132 of CGST Act, 2017 is that when the very power to order arrest under Section 69(1) is confined only to cognizable and non-bailable offences, we do not know how an order for arrest can be passed under Section 69(1) in respect of offences which are declared non-cognizable and bailable under sub-section (4) of Section 132 of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST Act. [paras 30, 31, 32, 33, 34, 35, 36, 37, 38, 39] Arrest - Offence under Central Goods and Services Tax Act, 2017 - Power of Commissioner conferred with powers of search and seizure under Section 67(10) of Central Goods and Services Tax Act, 2017 in the same manner as provided in Section 165 of Code of Criminal Procedure, 1973 - Cannot be said that accused cannot take umbrage under Sections 41 and 41A ibid - Commissioner upon concluding that reasons to believe that a person has committed a cognizable and non-bailable offence warranting his arrest existed, must keep in mind safeguards as provided in Sections 41 and 41A ibid before arresting a person. - Though for the purpose of summoning of witnesses and for summoning the production of documents, the Proper Officer holding the enquiry under the CGST Act, 2017 is treated like a Civil Court, there are four other places in the Act, where a reference is made, directly or indirectly, to the Cr.P.C. They are the reference to Cr.P.C. in relation to search and seizure under Section 67(10) of CGST Act, 2017, the reference to Cr.P.C. under sub-section (3) of Section 69 in relation to the grant of bail for a person arrested in connection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a non-cognizable and bailable offence, the reference to Cr.P.C. in Section 132(4) while making all offences under the CGST Act, 2017 except those specified in clauses (a) to (d) of Section 132(1) of CGST Act, 2017 as non-cognizable and bailable and the reference to Sections 193 and 228 of IPC in Section 70(2) of the CGST Act, 2017. Therefore, the contention of learned Additional Solicitor General that in view of Section 69(3) of the CGST Act, 2017, the petitioners cannot fall back upon the limited protection against arrest, found in Sections 41 and 41A of Cr.P.C., may not be correct. As pointed out earlier, Section 41A was inserted in Cr.P.C. by Section 6 of the Code of Criminal Procedure (Amendment) Act, 2008. Under sub-section (3) of Section 41A of Cr.P.C., a person who complies with a notice for appearance and who continues to comply with the notice for appearance before the Summoning Officer, shall not be arrested. In fact, the duty imposed upon a Police Officer under Section 41A(1) of Cr.P.C., to summon a person for enquiry in relation to a cognizable offence, is what is substantially ingrained in Section 70(1) of the CGST Act. Though Section 69(1) which confers powers upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Commissioner to order the arrest of a person does not contain the safeguards that are incorporated in Section 41 and 41A of Cr.P.C., we think Section 70(1) of the CGST Act takes care of the contingency. But, it may be remembered that Section 41A(3) of Cr.P.C., does not provide an absolute irrevocable guarantee against arrest. [paras 37, 38, 39, 40, 41, 42, 43] Offence under taxing statute - General principles. - Officers under various tax laws such as the Central Excise Act, etc., are not police officers to whom Section 25 of the Indian Evidence Act, 1872 would apply; that the power conferred upon the officers appointed under various tax enactments for search and arrest are actually intended to aid and support their main function of levy and collection of taxes and duties; that a person against whom an enquiry is undertaken under the relevant provisions of the tax laws, does not automatically become a person accused of an offence, until prosecution is launched; that the statements made by persons in the course of enquiries under the tax laws, cannot be equated to statements made by persons accused of an offence; and that as a consequence, there is no protection for such perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns under Article 20(3) of the Constitution of India, as the persons summoned for enquiry are not persons accused of any offence within the meaning of Article 20(3) of the Constitution of India. [para 13] Enquiry under Central Goods and Services Tax Act, 2017 - Enquiry by officers of the GST Commissionerate not criminal proceeding but nevertheless a judicial proceeding - Proper Officer under Act conferred with powers conferred upon Civil Court under Order XVI of Code of Civil Procedure, 1908 - Section 70 of Central Goods and Services Tax Act, 2017. [paras 17, 18, 19, 20] Arrest - Offence under Central Goods and Services Tax Act, 2017 - Reason to believe in Section 69 ibid need not be recorded in authorisation for if recorded in file. - Section 69(1) of the CGST Act, 2017 specifically uses the words reasons to believe , in contrast to the words reasons to be recorded appearing in Section 41A(3) of Cr.P.C., we think that it is enough if the reasons are found in the file, though not disclosed in the order authorizing the arrest. [paras 45, 46] Writ jurisdiction - Maintainability - Challenge to arrest under Section 69 of Central Goods and Services Tax Act, 2017 - Since no first informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion report gets registered before power of arrest under Section 69(1) ibid invoked - Petitioners cannot invoke Section 438 of Code of Criminal Procedure, 1973 for anticipatory bail - Only way it can seek protection against pre-trial arrest (actually pre-prosecution arrest) is to invoke writ jurisdiction of High Court - Where applicability of Section 438 ibid specifically excluded, High Court to be extremely cautious in exercising same power indirectly by resorting to Article 226 of Constitution of India - Article 226 ibid can be invoked even in cases where Section 438 ibid had no application - Limited protection against arrest available under Sections 41 and 41A ibid may be available even to a person sought to be arrested under Section 69(1) of Central Goods and Services Tax Act, 2017 - Writ petitions maintainable. - There is a fundamental distinction between a petition for anticipatory bail and the writ of mandamus to direct an officer not to effect arrest. A writ of mandamus would lie only to compel the performance of a statutory or other duty. No writ of mandamus would lie to prevent an officer from performing his statutory functions. [2014 (4) SCC 453, 1994 (3) SCC 569 relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n]. [paras 15, 21, 22, 23, 24, 48] Petitions dismissed (1) Arrest for offences under GST Person involved in circular trading and fraudulent ITC claim not entitled to relief against pre-trial arrest (2) Prosecution for offences under Section 132(1) of CGST Act, 2017 should not mandatorily be launched only after completion of assessment (3) Arrest for offences under GST Merely that these are compoundable cannot be a ground not to arrest the accused (4) Compounding of offences under GST not permissible without any application and payment of compounding amount by the accused (5) Arrest for offences under GST Accused person may either be released on bail by Magistrate or remanded to judicial custody and not to police custody or custody to proper officer (6) Arrest for offences under GST Safeguards provided under Sections 41 and 41A of Cr.P.C. though not an absolute irrevocable guarantee against arrest to be considered before arresting an accused (7) Enquiry under GST by GST Commissionerate is a judicial proceedings and not a criminal proceedings (8) Arrest for offences under GST Reasons therefor need not to be recorded in order of authorization when same contained in file (9) Arrest for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offences under GST In absence of any pre-arrest FIR, remedy against pre-trial arrest lies by way of filing writ petition and not by seeking anticipatory bail under Section 438 of Cr.P.C. The Supreme Court Bench comprising Hon ble Mr. Chief Justice Ranjan Gogoi and Hon ble Mr. Justice Aniruddha Bose on 27-5-2019 dismissed the Petition for Special Leave to Appeal (Crl.) No. 4430 of 2019 filed by P.V. Ramana Reddy against the Judgment and Order dated 18-4-2019 of Telangana High Court in Writ Petition No. 4764 of 2019 as reported in 2019 (25) G.S.T.L. 185 (Telangana) (P.V. Ramana Reddy v. Union of India) . While dismissing the petition, the Supreme Court passed the following order : SLP (Crl.) No. 4430/2019 Having heard Learned Counsel for the petitioner and upon perusing the relevant material, we are not inclined to interfere. The special leave petition is accordingly dismissed. Pending interlocutory applications, if any, shall stand disposed of. Diary No. 15477/2019, SLP (Crl.) Nos. 4322-4324/2019, SLP (Crl.) No. 4571/2019 and SLP (Crl.) No. 4546/2019 List the matters on 29-5-2019. The Telangana High Court in its impugned order had held that since the accused was allegedly involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in circular trading with turnover on paper and also in fraudulent claims of Input Tax Credit (ITC) depriving Government of its dues, which constitute a threat to very implementation of GST law within short duration of its inception, he was not entitled to any relief against his arrest. His contention that the prosecution for offences under Section 132(1) of CGST Act, 2017 can be launched only after completion of assessment, was held to be not acceptable. Merely because offences under CGST Act, 2017 are compoundable cannot be a ground not to arrest the accused. The High Court had also held that that the offences under the CGST Act, 2017 cannot be compounded without any application by the accused to that effect and payment of compounding amount. The High Court had held that the arrested person should be produced by the authorized officer before the Magistrate within 24 hours who may either remand him to judicial custody or release him on bail. The question of giving such person to police custody or custody to proper officer does not arise. The contention that the proper officer not being a police officer could not seek custody of arrested person, was held to be not tenable. The High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court had also observed that since the power of Commissioner to order for arrest under Section 69(1) of CGST Act, 2017 is confined only to cognizable and non-bailable offences, it is not known as to how he can pass an order for arrest for offences specified under clauses (f) to (l) of Section 132(1) which are declared non-cognizable and bailable under Section 132(4) of the said Act. It seems that there are some incongruities between Sections 69(1) and 132 of the Act. The High Court had held that though Section 69(1) of CGST Act, 2017 which confers power upon the Commissioner to order arrest of a person for cognizable and non-bailable offence does not contain safeguards incorporated in Sections 41 and 41A of the Code of Criminal Procedure, 1973 in view of provisions of Section 70(1) of the said Act same must be kept in mind before arresting a person. However, Section 41A(3) of the Code of Criminal Procedure does not provide an absolute irrevocable guarantee against arrest. The High Court had held that the enquiry by GST Commissionerate under Central Goods and Services Tax Act, 2017 is a judicial proceedings and not a criminal proceedings. It was held that if the reasons to believe t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat a person committed any offence under clauses (a), (b), (c) or (d) of Section 132(1) of CGST Act, 2017 warranting his arrest though found in the file but not disclosed in the order authorizing the arrest, the same is enough and it is not required to be recorded in order of authorization. The High Court had also held that since no FIR lodged before exercising power of arrest under Section 69(1) of CGST Act, 2017, the accused person cannot invoke Section 438 of Code of Criminal Procedure for anticipatory bail. Only way open to him is to seek protection against pre-trial/pre-prosecution arrest by invoking writ jurisdiction of the High Court under Article 226 of the Constitution of India. [ P.V. Ramana Reddy v. Union of India - 2019 (26) G.S.T.L. J175 (S.C.)] 2023 (76) G.S.T.L. 146 (S.C.) IN THE SUPREME COURT OF INDIA J.B. Pardiwala and Prashant Kumar Mishra, JJ. STATE OF GUJARAT Versus CHOODAMANI PARMESHWARAN IYER Petition for Special Leave to Appeal (Crl.) Nos. 4212-4213 of 2019, decided on 17-7-2023 Bail - Arrest - Summons for recovery - Summons issued to respondent-assessee for recovery of service tax liability - Respondent apprehended arrest - High Court issued direction to res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent to represent their case before concerned authority who will complete process in 8 weeks time and after adjudicatory process is completed, if assessee is not ready to fulfil their obligation and apprehend arrest, they might be given an opportunity of two more weeks for taking necessary steps - On revenue s appeal, HELD : Person summoned cannot invoke Section 438 of Code of Criminal Procedure, 1973 for anticipatory bail at stage of summons - Power to arrest a person is statutory in character and ordinarily writ court should not interfere with exercise of such power - One more opportunity was given to respondents to appear before authorities for purpose of recording of their statements - If respondents failed to appear, then it would be open for authority concerned to proceed further in accordance with law - Section 73 of Finance Act, 1994 - Section 14 of Central Excise Act, 1944 as made applicable to service tax vide Section 83 of Finance Act, 1994 - Section 132 read with Section 69 of Central Goods and Services Tax Act, 2017. [paras 5, 6, 12, 16, 19] Appeals allowed in favour of department CASE REVIEW Choodamani Parmeshwaran Iyer v. State of Gujarat (2023) 8 Centax 223 (Guj. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Reversed [Paras 7, 11, 20] CASES CITED Kartar Singh v. State of Punjab (1994) 3 SCC 569 Referred ....................................... [Para 17] P.V. Ramana Reddy v. Union of India 2019 (26) G.S.T.L. J175 (S.C.) Referred ........ [Para 18] P.V. Ramana Reddy v. Union of India 2019 (25) G.S.T.L. 185 (Telangana) Approved [Para 18] Union of India v. Padam Narain Aggarwal 2008 (231) E.L.T. 397 (S.C.) Referred ... [Para 13] REPRESENTED BY : S/Shri Kanu Agarwal and Madhav Sinhal, Advocates, Ms. Deepanwita Priyanka, AOR, for the Petitioner. S/Shri K.M. Nataraj, ASG, Prashant Singh I, V. Balaji, Ms. Manjula Gupta, Shailesh Madiyal, Sharath Nambiar, Advocates, R.P. Gupta and Mukesh Kumar Maroria, AORs, for the Respondent. [Order]. - Leave granted. 2. The Learned Counsel appearing for the private respondents (Assessees) submitted that he is not in a position to assist this Court as his clients are not in touch with him past almost six months. 3. In view of the aforesaid, we had no benefit of any assistance from the Learned Counsel appearing for the private respondents. 4. We have heard Mr. Kanu Agarwal, the Learned Counsel appearing for the State of Gujarat. 5. It appears from the materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls on record that a summons came to be issued dated 31-10-2018 to the respondents under Section 14 of the Central Excise Act, 1944 (for short the Act 1944 ) as made applicable to the service tax vide Section 83 of the Finance Act, 1994 and Section 70 of the Central Goods and Services Tax Act, 2017 (for short the CGST Act 2017 ) calling upon them to remain present for the purpose of interrogation in connection with an inquiry against one M/s. Iyer Enterprise Mundra Kutch. The authority concerned wants to interrogate the respondents in regard to the alleged evasion of Goods and Services Tax Liability/Contravention of the Provision of the Finance Act, 1994 and CGST Act 2017. 6. Upon receipt of the summons, the respondents apprehended arrest at the end of the concerned officials of the Department. 7. In such circumstances as referred to above, two writ applications came to be filed before the High Court being Special Criminal Application Nos. 11010 of 2018 and 11076 of 2018 resply [ (2023) 8 Centax 223 (Guj.) = [2023] 152 taxmann.com 521]. Both the writ applications came to be disposed by a common order dated 24-12-2018. The relevant part of the impugned order reads thus :- 7. Consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the voluntary nature of pleadings where the petitioners are desirous of getting themselves assisted by the adjudicatory process, let them represent their case before the concerned authority. The authority concerned shall complete the same in 8 weeks time and if there is a need for any apprehension after once the adjudicatory process is completed, if they are not ready to fulfill their obligation, they may be given an opportunity of two more weeks for taking necessary steps. Petitioners shall appear on or before 11-1-2019 before the concerned Police Station. In view of the above, the present applications stand disposed of. Direct service is permitted. 8. The State of Gujarat being dissatisfied with the aforesaid order passed by the High Court is here before this Court with the present appeal. 9. For the first time, this Court took up the matter on 29-4-2019 and issued notice. While issuing notice, this Court granted relief staying the directions issued by the High Court that the adjudicatory process must be completed within a period of eight weeks. 10. The Learned Counsel appearing for the State of Gujarat pointed out that as many as 14 summons have been issued to one of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondents. Only once, one of the respondents appeared for the purpose of interrogation. Thereafter, none of the respondents appeared before the authority. It s been now 5 years that the inquiry is still pending. He further submitted that it is only after the respondents are interrogated, that the department will be able to ascertain whether there is any evasion or not and on the basis of which the future course of action like filing of complaint etc., would be decided. 11. We are not convinced with the manner in which the High Court has disposed of both the writ applications filed by the respondents. It was expected of the respondents to honour the summons and appear before the authority for the purpose of interrogation. 12. It is well-settled position of law that power to arrest a person by an empowered authority under the GST Act and could be termed as statutory in character and ordinarily the writ court should not interfere with exercise of such power. We say so because such power of arrest can be exercised only in those cases where the Commissioner or his delegatee has reasons to believe that the person has committed any offence specified in clause (a) or clause (b) or clause (c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or clause (d) of sub-section (1) of Section 132 which is punishable under clause (i) or (ii) or sub-section (1) or sub-section (2) of the said section. 13. As observed by this Court in Union of India v. Padam Narain Aggarwal and Ors., (2008) 13 SCC 305 = 2008 (231) E.L.T. 397 (S.C.), (which was in context with the powers of Custom Officers to arrest under the Customs Act) such statutory powers must be exercised on objective facts of commission of an offence enumerated and the officer concerned must have reason to believe that a person sought to be arrested has been guilty of such an offence. 14. This Court in Padam Narain Aggarwal (supra) made it very clear that ordinarily the Court should not impose any condition before effecting arrest. If any conditions are imposed before effecting arrest for instance giving prior intimation to the person concerned etc., the statutory provisions would be rendered ineffective, nugatory and meaningless. 15. What is important are the observations made in paragraphs 44 and 45 resply of the decision of this Court in the case of Padam Narain Aggarwal (supra), which read thus :- 44. In the case on hand, the respondents were only summoned under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 108 of the Act for recording of their statements. The High Court was conscious and mindful of that fact. It, therefore, held that the applications for anticipatory bail, in the circumstances, were premature. They were, accordingly, disposed of by directing the respondents to appear before the Customs Authorities. The Court, however, did not stop there. It stated that even if the Customs Authorities find any non-bailable offence against the applicants (the respondents herein), they shall not be arrested without ten days prior notice to them. 45. In our judgment, on the facts and in the circumstances of the present case, neither of the above directions can be said to be legal, valid or in consonance with law. Firstly, the order passed by the High Court is a blanket one as held by the Constitution Bench of this Court in Gurbaksh Singh and seeks to grant protection to the respondents in respect of any non-bailable offence. Secondly, it illegally obstructs, interferes and curtails the authority of the Customs Officers from exercising statutory power of arrest of a person said to have committed a non-bailable offence by imposing a condition of giving ten days prior notice, a condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not warranted by law. The order passed by the High Court to the extent of directions issued to the Customs Authorities is, therefore, liable to be set aside and is hereby set aside. (Emphasis supplied) 16. Thus, the position of law is that if any person is summoned under Section 69 of the CGST Act, 2017 for the purpose of recording of his statement, the provisions of Section 438 of Criminal Procedure Code, 1908 cannot be invoked. We say so as no First Information Report gets registered before the power of arrest under Section 69(1) of the CGST Act, 2017 is invoked and in such circumstances, the person summoned cannot invoke Section 438 of the Code of Criminal Procedure for anticipatory bail. The only way a person summoned can seek protection against the pre-trial arrest is to invoke the jurisdiction of the High Court under Article 226 of the Constitution of India. Undoubtedly, this is exactly what the respondents did in the present case. What the respondents sought by filing two criminal applications under Article 226 of the Constitution before the High Court was the direction to the appellant herein not to arrest them in exercise of the power conferred by Section 69(1) of the GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2017. This, in essence, is key to prayer for anticipatory bail. However, as we have explained aforesaid, at the stage of summons, the person summoned cannot invoke Section 438 of the Code of Criminal Procedure. 17. This Court in Kartar Singh v. State of Punjab, (1994) 3 SCC 569, has, in no uncertain terms, observed that a claim for pre-arrest protection is neither a statutory right nor a right guaranteed under Articles 14, 19 and 21 resply of the Constitution of India. Although the Constitution Bench of this Court held that there is no bar for the High Court to entertain an application for pre-arrest protection under Article 226 of the Constitution of India, yet it was held that such power should be exercised sparingly. There is a fundamental distinction between a petition for anticipatory bail and the writ of mandamus directing an officer not to effect arrest. A writ of mandamus would lie only to compel the performance of the statutory or other duties. No writ of mandamus would lie to prevent an officer from performing his statutory function. When a writ application is filed before the High Court under Article 226 of the Constitution, the writ court owes a duty to examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact of the case and ascertain whether the case of the writ applicant falls under the category of exceptional cases as indicated in Kartar Singh (supra). The writ court should also ensure whether by issuing the writ of mandamus, it would be preventing the competent authority or proper officer from performing any of their statutory functions. 18. In the aforesaid context, we may refer to a Division Bench decision of the High Court of Telangana which ultimately came to be affirmed by this Court in the Special Leave Petition (Crl.) No. 4430 of 2019 order dated 27-5-2019 [ 2019 (26) G.S.T.L. J175 (S.C.) = [2019] 106 taxmann.com 301]. We are referring to a decision in the case of P.V. Ramana Reddy v. Union of India, Writ Petition No. 4764 of 2019 and allied petitions decided on 18th April, 2019 [ 2019 (25) G.S.T.L. 185 (Telangana) = [2019] 104 taxmann.com 407/73 GST 727 (Telangana)]. There are few important observations made by the High Court and we are in complete agreement with the said observations. The observations of the High Court fell in the context of certain incongruities noticed in Section 69(1) and Section 132 resply of the CGST Act, 2017. We quote the relevant observations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereunder :- 34. If CGST Act, 2017 is a complete code in itself in respect of (1) the acts that constitute offences, (2) the procedure for prosecution and (3) the punishment upon conviction, then the power of Commissioner, who is not a Police Officer, to order the arrest of a person should also emanate from prescription contained in the Act itself. Section 69(1) of CGST Act, 2017 very clearly delineates the power of the Commissioner to order the arrest of a person whom he has reasons to believe, to have committed an offence which is cognizable and non-bailable. Therefore, we do not know how a person whom the Commissioner believes to have committed an offence specified in clauses (f) to (l) of sub-section (1) of Section 132 of CGST Act, which are non-cognizable and bailable, could be arrested at all, since Section 69(1) of the CGST Act, 2017 does not confer power of arrest in such cases. 35. The fact that the power of arrest under Section 69(1) of the CGST Act, 2017 is confined only to cognizable and non-bailable offences, is also fortified by sub-section (2) of Section 69 which obliges the Officer, who carries out the arrest to inform the arrested person of the grounds of arrest an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to produce him before a Magistrate within 24 hours. The duty enjoined upon the Officer carrying out the arrest, to inform the arrested person of the grounds of arrest and to produce him before a Magistrate within 24 hours, is co-relatable under sub-section (2) of Section 69 of the CGST Act, 2017 to Section 132(5) of the CGST Act, 2017 that deals only with cognizable and non-bailable offences. 36. But, interestingly, clauses (a) and (b) of sub-section (3) of Section 69 of the CGST Act, 2017 deal in entirety only with cases of persons arrested for the offences which are indicated as non-cognizable and bailable. The phrase subject to the provisions of the Code of Criminal Procedure is used only in sub-section (3), which deals in entirety only with the procedure to be followed after the arrest of a person who is believed to have committed a non-cognizable and bailable offence. While clause (a) of sub-section (3) gives two options to the Officer carrying out the arrest, namely, to grant bail by himself or to forward the arrested person to the custody of the Magistrate, clause (b) confers the powers of an Officer incharge of a police station, upon the Deputy Commissioner or the Assista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner (GST), for the purpose of releasing an arrested person on bail, in the case of non-cognizable and bailable offences. 37. In other words, even though Section 69(1) of the CGST Act, 2017 does not confer any power upon the Commissioner to order the arrest of a person, who has committed an offence which is non-cognizable and bailable, sub-section (3) of Section 69 of the CGST Act, 2017 deals with the grant of bail, remand to custody and the procedure for grant of bail to a person accused of the commission of non-cognizable and bailable offences. Thus, there is some incongruity between sub-sections (1) and (3) of Section 69 read with Section 132 of the CGST Act, 2017. 38. Another difficulty with Section 69 of the CGST Act, 2017 is that sub-sections (1) and (2) of Section 69 which deal with the power of arrest and production before the Magistrate in the case of cognizable and non-bailable offences, do not use the phrase subject to the provisions of Cr.P.C. This phrase is used only in sub-section (3) of Section 69 in relation to the arrest and grant of bail for offences which are non-cognizable and bailable, though no power of arrest is expressly conferred in relation to n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-cognizable and bailable offences. 39. It is important to note that under sub-section (4) of Section 132 of the CGST Act, 2017, all offences under the Act except those under clauses (a) to (d) of Section 132(1), are made non-cognizable and bailable, not-withstanding anything contained in Cr.P.C. In addition, Section 67(10) of the CGST Act, 2017 makes the provisions of Cr.P.C. relating to search and seizure, apply to searches and seizures under this Act, subject to the modification that the word Commissioner shall substitute the word Magistrate appearing in Section 165 (5) of Cr.P.C., in its application to CGST Act, 2017. 40. Therefore, (1) in the light of the fact that Section 69(1) of the CGST Act, 2017 authorizes the arrest only of persons who are believed to have committed cognizable and non-bailable offences, but Section 69(3) of the CGST Act, 2017 deals with the grant of bail and the procedure for grant of bail even to persons who are arrested in connection with non-cognizable and bailable offences and (2) in the light of the fact that the Commissioner of GST is conferred with the powers of search and seizure under Section 67(10) of the CGST Act, 2017, in the same manner as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided in Section 165 of the Cr.P.C., 1973, the contention of the Additional Solicitor General that the petitioners cannot take umbrage under Sections 41 and 41A of Cr.P.C. may not be correct. 41. Though for the purpose of summoning of witnesses and for summoning the production of documents, the Proper Officer holding the enquiry under the CGST Act, 2017 is treated like a Civil Court, there are four other places in the Act, where a reference is made, directly or indirectly, to the Cr.P.C. They are (1) the reference to Cr.P.C. in relation to search and seizure under Section 67(10) of CGST Act, 2017, (2) the reference to Cr.P.C. under sub-section (3) of Section 69 in relation to the grant of bail for a person arrested in connection to a non-cognizable and bailable offence, (3) the reference to Cr.P.C. in Section 132(4) while making all offences under the CGST Act, 2017 except those specified in clauses (a) to (d) of Section 132(1) of CGST Act, 2017 as non-cognizable and bailable and (4) the reference to sections 193 and 228 of IPC in section 70(2) of the CGST Act, 2017. Therefore, the contention of Learned Additional Solicitor General that in view of section 69(3) of the CGST Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, the petitioners cannot fall back upon the limited protection against arrest, found in Sections 41 and 41A of Cr.P.C., may not be correct. As pointed out earlier, Section 41-A was inserted in Cr.P.C. by Section 6 of the Code of Criminal Procedure (Amendment) Act, 2008. Under sub-section (3) of Section 41A Cr.P.C., a person who complies with a notice for appearance and who continues to comply with the notice for appearance before the Summoning Officer, shall not be arrested. In fact, the duty imposed upon a Police Officer under Section 41A(1) Cr.P.C., to summon a person for enquiry in relation to a cognizable offence, is what is substantially ingrained in Section 70(1) of the CGST Act. Though section 69(1) which confers powers upon the Commissioner to order the arrest of a person does not contain the safeguards that are incorporated in Section 41 and 41A of Cr.P.C., we think Section 70(1) of the CGST Act takes care of the contingency. 42. In any case, the moment the Commissioner has reasons to believe that a person has committed a cognizable and non-bailable offence warranting his arrest, then we think that the safeguards before arresting a person, as provided in Sections 41 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 41A of Cr.P.C., may have to be kept in mind. 43. But, it may be remembered that Section 41A(3) of Cr.P.C., does not provide an absolute irrevocable guarantee against arrest. Despite the compliance with the notices of appearance, a Police Officer himself is entitled under Section 41A(3) Cr.P.C., for reasons to be recorded, arrest a person. At this stage, we may notice the difference in language between Section 41A(3) of Cr.P.C. and 69(1) of CGST Act, 2017. Under Section 41A(3) of Cr.P.C., reasons are to be recorded , once the Police Officer is of the opinion that the persons concerned ought to be arrested. In contrast, Section 69(1) uses the phrase reasons to believe . There is a vast difference between reasons to be recorded and reasons to believe. 19. We are still inclined to give one more opportunity to both the respondents to appear before the authorities for the purpose of recording of their statements. If the respondents fail to appear, then it shall be open for the authority concerned to proceed further in accordance with law. 20. In view of the aforesaid, both the appeals stand allowed. The common order dated 24-12-2018 passed by the High Court is set aside. 21. Pending ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication(s), if any, stand(s) disposed of. _______ - CHARGE SHEET UNDER SECTION 132. - Query Started By: - Sadanand Bulbule Dated:- 19-1-2025 Last Replied Date:- 19-1-2025 Goods and Services Tax - GST - Got 1 Reply - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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