Writ Courts should not ordinarily interfere with power of arrest of GST officers: Supreme Court

The Supreme Court recently observed that the power of officers under the Central Goods and Services Tax Act 2017 (GST Act) to arrest a person could be termed as statutory in character and a writ court should not ordinarily interfere with exercise of such power [State of Gujarat v. Choodamani Parmeshwaran Iyer and Another]..A division bench of Justices JB Pardiwala and Prashant Kumar Mishra further said that courts should not ordinarily impose any condition before effecting arrest under Section 69 of the GST Act."The 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," the Court said.If any conditions are imposed before effecting arrest like instance giving prior intimation to the person concerned etc, the statutory provisions would be rendered ineffective and meaningless, the Court added..The Court was hearing an appeal challenging a decision of the Gujarat High Court which had allowed the writ applications of the respondents..By way of background, on October 31, 2018, summons came to be issued to the respondents calling upon them to remain present for interrogation in connection with an inquiry against M/s Iyer Enterprise Mundra Kutch. The authority concerned under the GST Act wanted to interrogate the respondents with regard to the alleged evasion of Goods and Service Tax Liability/Contravention of the Provision of the Finance Act 1994 and CGST Act.Upon receipt of summons, the respondents apprehended arrest and moved two writ applications before the High Court, which disposed of the same by putting certain conditions on the authority with regard to interrogation in the matter.Aggrieved, the State of Gujarat moved the present appeal before the apex court..Before the apex court, the State argued that as many as 14 summons were issued to one of the respondents but he appeared for interrogation only once. It was further argued that the inquiry started five years ago and it is only after the respondents are interrogated that the authority will be able to ascertain whether there was any evasion or not..The Supreme Court agreed with the contentions of the State and said that the respondents have to honour the summons and appear before the authority for the purpose of interrogation.With regard to the power of arrest of officers under GST Act, the Court said that the same have a statutory character and writ courts should not generally interfere with the same. "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) 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," the Court observed..Placing reliance on its decision in Union of India v. Padam Narain Aggarwal and Others (2008), the Court observed that ordinarily a Court should not impose any condition before effecting arrest. The Court further made it clear that at the stage of summons, the person summoned cannot invoke Section 438 of the Code of Criminal Procedure (CrPC) for anticipatory bail."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 Court observed..It, therefore, allowed the appeal.However, the Court said that it is 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," the bench directed..Advocate Kanu Agarwal appeared for the State while Additional Solicitor General KM Nataraj appeared for the respondents. .[Read Judgment]