Goods and Services Tax evasion: SC agrees to examine power of tax officials to arrest individualshttps://indianexpress.com/article/business/goods-and-services-tax-evasion-sc-agrees-to-examine-power-of-tax-officials-to-arrest-individuals-5755401/

Goods and Services Tax evasion: SC agrees to examine power of tax officials to arrest individuals

The order also comes two days after the SC upheld a Telangana High Court verdict that had held that a person can be arrested by the concerned authority in cases of GST evasion.

Supreme Court, Telangana High Court, Goods and Services Tax, GST evasion, GST laws, Indian express
The direction comes after the central government had on Tuesday moved the Supreme Court seeking a clarification on the powers of officers under the Central Goods and Service Tax (CGST) Act to arrest accused persons without the filing of an FIR.

Issuing notices to the central government and private parties, the Supreme Court on Wednesday agreed to consider the legal questions relating to the power of government officials to arrest persons for Good and Services Tax (GST) evasion.

The vacation bench, headed Chief Justice of India Ranjan Gogoi and Justice Anirudha Bose, directed the government to reply to the notice within four weeks on the issue of arrest for GST evasion, observing that the “position of the law” has to be clarified since “different high courts of the country have taken divergent views”.

“As different high courts of the country have taken divergent views in the matter, we are of the view that the position in law should be clarified by this Court. Hence, the notice,” the bench said. A three judge bench will now hear the matter.

The direction comes after the central government had on Tuesday moved the Supreme Court seeking a clarification on the powers of officers under the Central Goods and Service Tax (CGST) Act to arrest accused persons without the filing of an FIR.

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In the special leave petition, the Centre challenged the order of the Bombay High Court, which had held that accused person cannot be arrested without following the procedure as laid down under the Code of Criminal Procedure (CrPC).

On Wednesday, the apex court, however, said that it would not interfere with the pre-arrest bail granted to the individuals by the Bombay High Court.

“However, we make it clear that the high courts while entertaining such request (protection from arrest) in future, will keep in mind that this Court by order dated May 27 … had dismissed the special leave petition filed against the judgement and order of the Telangana High Court in a similar matter, wherein the High Court of Telangana had taken a view contrary (refused to grant protection from arrest) to what has been held by the High Court in the present case,” the vacation bench said.

The order also comes two days after the SC upheld a Telangana High Court verdict that had held that a person can be arrested by the concerned authority in cases of GST evasion.

In the Telangana case, the division bench, comprising Justices V Ramasubramanian and P Keshava Rao, had said it was not inclined to grant relief against arrest to petitioners who had approached it challenging the summons issued by Superintendent (Anti-Evasion) of the Hyderabad GST Commissionerate under the CGST Act, 2017, stating the sub section (1) of Section 69 of the CGST Act empowers the commissioner to order the arrest of a person.

“If reasons to believe are recorded in the files, we do not think it is necessary to record those reasons in the authorization for arrest under Section 69(1) of the CGST Act. Since 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) if Cr.P.C,, we think that it is enough if the reasons are found in the file, though not disclosed in the order authorizing arrest,” the Telangana HC had observed.