Order u/s 69 of the CGST Act authorising arrest of a person has to be communicated to him before arrest– Supreme Court
In a recent judgment Hon’ble Supreme Court has held that order under Section 69 of the CGST Act being a sine qua non to seek anticipatory bail has to be communicated before arrest of such person.
ABCAUS Case Law Citation:
5208 (2026) (08) abacus.in ITAT
Important Case Laws relied upon by Parties:
Radhika Agarwal v. Union of India
State of Orissa v. Madan Gopal Rungta
In the instant case, the GST Department had challenged the order passed by the Hon’ble High Court whereby High Court granted protection to the respondent from arrest for a week from date of intimation of the order High Court granted protection to him from arrest for a week from date of intimation of the order passed under section 69 of Central Goods and Services Tax Act, 2017 (the Act).
The Directorate General of GST Intelligence (DGGI) was investigating a company and its group entities allegedly for wrongfully availing and passing of Input Tax Credit (ITC) without actual supply of goods or services, circular invoicing, and non-payment of GST on import of services.
During inspection of the registered premises, the respondent was found present. During the investigation, the Department issued three summonses under Section 70 of the Act to the respondent. Instead of appearing, the respondent sought adjournments and thereafter filed an application for anticipatory bail before the Sessions Court which was rejected.
The Respondent then approached the High Court seeking pre-arrest bail. Pursuant to the High Court’s interim directions, the respondent appeared before the Department and his statement was recorded. The Department filed an affidavit averring that no order under Section 69 of the Act had been passed as the investigation was still at a nascent stage and the material facts were under verification.
The High Court rejected the application for anticipatory bail noting that in the absence of an order under Section 69 of the CGST Act, there could be no apprehension of arrest and, hence, an application for anticipatory bail could not be entertained; nonetheless, the High Court granted relief to the respondent ordering that he shall not be arrested for a period of one week, if the order under Section 69 of the Act is passed, from the date of intimation of such order to the respondent.
The question that fall for the consideration by the Hon’ble Supreme Court was whether the High Court could have granted the relief of protection from arrest for a period of one week of communication of the order passed under Section 69 of the Act while dismissing the application?
The Hon’ble Supreme Court observed that a constitution bench had laid down the law that a petition under Article 226 of the Constitution of India cannot be used for the sole purpose of issuing interim relief when the high court is of the considered opinion that the petition itself is not maintainable. It held so on the established principle that an interim relief can only be in the aid of and ancillary to the main relief.
The Hon’ble Supreme Court further observed that a Division Bench has held that once the writ petition claiming main relief for quashing of FIR or the charge-sheet itself is dismissed, the question of granting further relief after dismissal of the writ petition, does not arise. Since the grounds on which such an FIR or charge-sheet can be quashed are limited, once the writ petition challenging the validity of the FIR or charge-sheet is dismissed, the grant of relief, incidental in nature, against arrest would obviously not arise, even when a justifiable case for grant of anticipatory bail is made out.
In view of the above, the Hon’ble Supreme Court held that while dismissing a petition seeking pre-arrest bail on the ground that the same is not maintainable – whatever be the ground therefor – the high court or the sessions court, as the case may be, cannot extend or grant protection which is in the nature of interim relief that could be granted during the pendency of the application.
As a result, the Hon’ble Supreme Court set aside the protection granted by the Hon’ble High Court to the respondent.
However, the Hon’ble Supreme Court also addressed a subsidiary question as to whether the order passed by the Commissioner under Section 69 of the CGST Act is required to be communicated to the person sought to be arrested?
The Hon’ble Supreme Court noted that Sub-section (1) of Section 69 grants the Commissioner the power to authorise any officer to arrest a person. Such order must, as prescribed, be preceded by “reasons to believe”. Such reasons in turn, must refer to the material and evidence underlying such opinion and evince application of mind.
Before the Hon’ble Supreme the respondent argued that until and unless an order under Section 69 of Act is passed by the Commissioner recording the “reasons to believe” that an offence under Section 132 of the CGST Act has been committed, no alarm is activated and there cannot be any apprehension of arrest by the person summoned. In other words, once the Commissioner concludes that there are “reasons to believe” that any offence of the nature stated in Section 69 has been committed warranting an arrest and an order to that effect is passed, the alarm is activated and the person (alleged to be the offender, whose arrest is authorised) becomes an accused who is open to be arrested and, thus, acquiring the right to seek pre-arrest bail. Consequently, an order under Section 69 of the CGST Act would be a sine qua non to maintain an application seeking such bail.
It was further contended that unless the order passed under Section 69 is communicated to the accused/respondent, he cannot apply for an anticipatory bail. Though not mandated by the statute, by extension of the principles of natural justice and fairness in administrative action, the requirement of communication of the order passed under Section 69 of the CGST Act to the accused before he is arrested, has to be read into the statute and communication of such an order to the person sought to be arrested must be held to be mandatory. If not, it would lead to a catch-22 situation where the accused can neither apply for anticipatory bail till the order under Section 69 is passed nor does he become aware of the order to subject the same to a challenge on available grounds before an appropriate forum.
The Hon’ble Supreme Court expresses agreement with the contention and observed that order under Section 69 of the CGST Act, as held, being a sine qua non to seek anticipatory bail, it would be an anomaly to hold that the order need not be communicated at all, much less, be communicated after the arrest of such person. In any case, communication of the order would not, in any manner, obstruct the investigation ensued by the department. On the contrary, it reinforces the right of the accused to seek anticipatory bail.
The Hon’ble Supreme Court further noted that a 5-Judge Bench of the Court intertwined personal liberty as an important facet of Section 438 of the Code of Criminal Procedure, 1973 (equivalent to Section 482, BNSS, 2023) and cautioned against an interpretation which imposes unreasonable restrictions.
The Hon’ble Supreme Court further opined that accused has a right to challenge the order and the “reasons to believe” recorded by the Commissioner, which prompted the issuance thereof. Such order, being amenable to judicial review by the constitutional courts, may be tested on settled principles of law. If Section 69 were read as it is, without there being any requirement of disclosure of the “reasons to believe”, withholding of reasons could have drastic consequences on the right to liberty of the accused.
The Hon’ble Supreme Court stated that the order u/s 69 may be communicated through electronic means in addition to the mode, as permitted under the BNSS, as well as all other permissible modes of communication. This would enable an accused to seek remedy that the law provides to him, if so advised.
As a result, the Hon’ble Supreme Court ordered that Commissioner shall communicate the order under Section 69 of the GST Act to the respondent electronically and other modes, whereafter he may pursue such remedy.
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