3-Judge Bench of Supreme Court to decide on powers of GST Officers to make arrests

3-Judge Bench of Supreme Court to decide on powers of GST Officers to make arrests

Shruti Mahajan

The Supreme Court today issued notice in a petition by the Central government seeking a clarification on the powers of the officers under the Central Goods and Service Tax Act (GST Act) to arrest accused persons without the filing of First Information Report (FIR).

A Vacation Bench of Chief Justice of India Ranjan Gogoi and Justice Aniruddha Bose also directed that the matter should be placed before a three-judge Bench.

It said that in light of the divergent views taken by various High Courts on this issue, the Court is inclined to issue notice returnable in four weeks.

The Court also stated that it is not inclined to interfere at this point with orders of the Bombay High Court against which these petitions are preferred by the Centre. The interim relief granted by the High Court to the Respondents in the case will, therefore, effectively continue.

However, the order dictated by the Court also makes a mention of its order passed on May 27 where the Court upheld the decision of the Telangana High Court of refusing to grant anticipatory bail to one PV Ramana Reddy in a similar matter. The Court today said that the High Courts while entertaining such requests in the future, must keep in mind that the Supreme Court confirmed the decision of not granting anticipatory bail. This, in effect, bars High Courts from granting relief in similar matters. The Court said,

“We make it clear that the High Courts while entertaining such request in future, will keep in mind that this Court by order dated 27.5.2019 passed in SLP(Crl.) No. 4430/2019 had dismissed the special leave petition filed against the judgment and order of the Telangana High Court in a similar matter, wherein the High Court of Telangana had taken a view contrary to what has been held by the HighCourt in the present case.”

In two Special Leave Petitions, the Central government has challenged the orders of the Bombay High Court in this regard. The High Court had held that an accused cannot be arrested without following the procedure as laid down under the Code of Criminal Procedure (CrPC), especially the requirement of registration of an FIR. The accused persons in the concerned cases were, therefore, granted interim relief by the High Court. The same has now been challenged by the Centre in Supreme Court.

It has been contended that a trend has emerged wherein persons accused in economic offences challenge the Constitutional validity of the statutory provisions under which they are charged.

“The UOI has observed that there is a growing tendency and a practice of short-circuiting the procedure established by law by individuals being investigated for economic offences by filing writ petitions, challenging the constitutional validity of each every provision, they being investigated under and seeking either regular bail or a custodial bail.”

However, there exists a difference of opinion on this issue among the High Courts, the petition points out. When relief was sought by one PV Ramana Reddy before the Telangana High Court while challenging the provisions relating to power to arrest under the CGST Act, the High Court had upheld the authority of the Commissioner of GST to make such arrests and had refused to grant any interim relief. The petition thus states,

“Therefore, it is clear that there is a difference of opinion between various High Court in the country, and it is imperative for this Hon’ble Court, to hear the present matter.”

The Centre has also contended that the provisions under the CrPC, especially those under Sections 154 to 157, and Section 172 would not apply to officers of the GST as these Sections specifically use the word “Police”. It is submitted that officers under the CGST Act are officers of the Revenue as held by the Supreme Court in various other cases, and are not Police officers.

The assailed orders of the Bombay High Court have the effect of “re-writing the provision as contained in Section 69 of the CGST Act, 2017”, the petition states. The directions of the High Court have rendered the statutory provisions under CGST Act “ineffective, nugatory and meaningless”, the Central government contends.

Solicitor General Tushar Mehta appeared for the Centre while Senior Advocate Mukul Rohatgi and Advocate Abhishek Rastogi represented the Respondents.

Read the Order:

Bar and Bench - Indian Legal news