No anticipatory bail, GST violators can be arrested without FIR, clarifies SC

No anticipatory bail, GST violators can be arrested without FIR, clarifies SC

No anticipatory bail, GST violators can be arrested without FIR, clarifies SC

NEW DELHI: The Supreme Court suggested to the high courts on Wednesday not to grant anticipatory bail to those who default on the goods and services tax, reminding them that the SC has upheld the Telangana HC’s decision not to grant bail to such defaulters.

A division bench of the Telangana HC had on April 18 upheld the authority and power of the commissioner of the central goods and services tax (CGST) to arrest, and rejected any interim relief to those accused of violating the CGST Act, 2017. The SC had on May 27 dismissed an appeal against the HC order. The Centre had argued that CGST officers were not police and hence not required to follow the provisions of the Criminal Procedure Code, which mandates registration of FIR prior to arrest.

The Centre had filed a bunch of appeals in the SC against a series of orders passed by the Bombay HC, which had granted pre-arrest bail to CGST Act violators on the ground that the CGST officials had not registered any FIR as warranted under the CrPC.

Challenging the Bombay HC’s orders, solicitor general Tushar Mehta said Parliament had segregated CGST Act from CrPC and provided a separate procedure for dealing with offenders. Mehta said the HC’s orders had brought “functions of the directorate general of GST intelligence to a grinding halt”.

A vacation bench of Chief Justice Ranjan Gogoi and Justice Aniruddha Bose said, “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.”

“As the accused-respondents have been granted the privilege of pre-arrest bail by high courts by the impugned orders, at this stage, we are not inclined to interfere with the same. However, we make it clear that the high courts, while entertaining such requests in future, will keep in mind that the Supreme Court by order dated May 27 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 high court (of Bombay) in the present case. Beyond the above, we do not consider it necessary to observe anything further,” it said.

Finding the writing on the wall, senior advocate Mukul Rohatgi requested the CJI to delete the reference to the apex court upholding the Telangana HC order as it would “close all doors” for the accused under CGST Act to seek relief. The bench refused to oblige and said, “That is the whole idea.”

Explaining the procedure under CGST Act, the Centre in its appeal said the law terms GST violations as a cognisable offence and provides power to the GST commissioner to arrest a person on the basis of “reasons to believe” that a person has committed the offence under Section 132 of the CGST Act. “Under special criminal law enactments, it is a settled law that there is no prior need to register an FIR before starting investigation or arresting a person,” it said.