The Supreme Court on Wednesday set aside a Bombay High Court order granting Future Group non-executive director Sunil Biyani one week’s protection from arrest in a Goods and Services Tax (GST) investigation, holding that the high court could not have granted such relief after concluding that his anticipatory bail plea was premature.
A bench of justices Dipankar Datta and Sheel Nagu, however, clarified that GST authorities are obligated to communicate to an individual the reasons for arrest recorded under Section 69 of the Central Goods and Services Tax (CGST) Act. The court said such communication could also be made through email.
The ruling came on an appeal by the Union government against the Bombay High Court’s February order, which had held that Biyani’s anticipatory bail plea was premature since no order authorising his arrest under Section 69 of the CGST Act had been issued, but nevertheless directed that if such an order was passed subsequently, he would not be arrested for one week from the date it was communicated to him.
The Supreme Court found this course of action impermissible.
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{{/usCountry}}The bench had during the hearing questioned the legal basis for the high court granting protection after finding that there was no immediate apprehension of arrest and that the anticipatory bail plea was therefore not maintainable.
The case arose from Biyani’s apprehension of arrest in connection with a GST investigation. He had approached the Bombay High Court in February after being summoned by GST authorities under Section 70 of the CGST Act.
Section 70 empowers GST officers to summon a person to give evidence or produce documents during an investigation. Section 69, meanwhile, empowers the Commissioner to authorise the arrest of a person where there are grounds to believe that the person has committed specified offences under the GST law, including certain cases involving fraudulent input tax credit or tax evasion.
The Centre had told the high court that no arrest order under Section 69 had been issued against Biyani. The high court consequently held his anticipatory bail plea to be premature, but proceeded to provide him limited protection in the event an arrest order was issued later.
The Union government challenged this part of the high court’s order before the Supreme Court.
During the proceedings, Biyani’s counsel had argued that an arrest under Section 69 could be authorised only after the Commissioner recorded the requisite “reasons to believe” and that an affected individual ought to be informed of such an order to enable him to exercise his legal remedies.
The argument was based on the concern that Section 69 arrest authorisations were not ordinarily available to the affected person and that an individual could otherwise be arrested without knowing the basis on which the Commissioner had authorised the arrest.
The Supreme Court has now accepted the importance of communicating the reasons for arrest, while rejecting the high court’s decision to grant advance protection from arrest.
The bench made clear that communication of the arrest authorisation and the reasons supporting it is distinct from granting interim protection in anticipatory bail proceedings that have been found to be premature.
The Centre had during the earlier proceedings also maintained that an order passed under Section 69 could be communicated to the person concerned and that the individual would retain the right to challenge the arrest order if the statutory requirement of recording reasons to believe had not been met.