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Beware! GST evaders can be arrested:Supreme Court

Beware! GST evaders can be arrested:Supreme Court

mangaloretoday network

New Delhi, May 28: The Supreme Court on Monday dismissed a plea challenging the Telangana High Court verdict that a person can be arrested by the concerned authority in cases of Goods and Services Tax (GST) evasion. Under GST laws, specified offences involving an alleged tax evasion of above Rs 2 crore as also post-conviction repeat offences sans any monetary limit could lead to arrest; if the tax amount involved is above Rs 5 crore, then the offence will be non-bailable.


While it rejected appeals against the Telangana HC, the apex court posted for Wednesday the government s appeals against the Bombay High Court s interim order. The Bombay HC had on April 11 given a contrary view, restraining the revenue authorities from taking any coercive action against the alleged evaders and also asked them to cooperate with the investigations.

Having heard counsel for the petitioner and upon perusing the relevant material, we are not inclined to interfere (with the Telangana HC order). The special leave petition is accordingly dismissed, an SC vacation bench of Chief Justice Ranjan Gogoi and Justice Aniruddha Bose said.

On April 18, the Telangana HC had said it was not inclined to grant relief against arrest, for alleged tax evasion, to the petitioners who had approached it challenging the summons issued by Superintendent (Anti-Evasion) of the Hyderabad GST Commissionerate, under the Central Goods and Services Tax (CGST) Act, 2017, and invocation of penal provisions under the law.

The Telangana HC had delivered the verdict which dealt with a batch of petitions filed by some private firms, its top officials and others. The Centre had told the HC that petitioners before it were allegedly involved in incorporating several partnership firms and had claimed input tax credit (ITC) on the basis of certain invoices, without there being any actual physical receipt of goods. It had alleged that the fraudulent ITC claimed by them was around Rs 224.05 crore.

The HC bench felt that sub Section (1) of Section 69 of the CGST Act empowers the commissioner to order arrest of a person, when such a person is believed to have committed a cognisable and non-bailable offence. It had said: If reasons to believe are recorded in the files, we do not think it is necessary to record those reasons in the authorisation for arrest under Section 69(1) of the CGST Act. Since Section 69(1) of the CGST Act, 2017, specifically uses the words reasons to believe , in contrast to the words reasons to be recorded appearing in Section 41A(3) of CrPC, we think that it is enough if the reasons are found in the file, though not disclosed in the order authorising the arrest.

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