GST Officer Power To Arrest

By | September 8, 2018
Print Friendly, PDF & Email
(Last Updated On: September 8, 2018)

GST Officer Power To Arrest

In this article we have discussed as to when can a person be arrested under GST Act and how he can be released.

Meaning of Arrest under GST

The term ‘arrest’ has not been defined in the CGST/SGST Act. However, as per judicial pronouncements, it denotes ‘the taking into custody of a person under some lawful command or authority’. In other words, a person is said to be arrested when he is taken and restrained of his liberty by power or colour of lawful warrant.

Video Presentation on Arrest Provisions in GST

When Can a person be Arrested under GST ?

A person can be arrested if offence specified under section 132(1) clauses (a) to (d) and which is punishable under

 This essentially means that a person can be arrested under GST only where the tax evasion is more than 2 crore rupees or where a he has been convicted earlier under CGST Act.

Relevant portion of Section 132(1) clauses (a) to (d) of CGST Act 2017   Whoever commits any of the following offences, namely:—

(a)supplies any goods or services or both without issue of any invoice, in violation of the provisions of this Act or the rules made thereunder, with the intention to evade tax;
(b)issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;
(c)avails input tax credit using such invoice or bill referred to in clause (b);
(d)collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

…..

shall be punishable

(i)in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with imprisonment for a term which may extend to five years and with fine;
(ii)in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds two hundred lakh rupees but does not exceed five hundred lakh rupees, with imprisonment for a term which may extend to three years and with fine;

……….

Person can also be arrested where a he has been convicted earlier under CGST Act.

Relevant portion of Section 132(2) of CGST Act 2017 

Where any person convicted of an offence under this section is again convicted of an offence under this section, then, he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to five years and with fine.

Who can exercise power to arrest under GST

If the Commissioner has reason to believe that any person has committed an offence specified under section 132(1) clauses (a) to (d) which is punishable under section 132(1) clause (i) or (ii), or 132(2) , he may, by order, authorise any officer of central tax to arrest such person [section 69(1) of CGST Act ]

What to be done if Person is arrested ?

Where a person is arrested under section 132(1)of CGST Act 2017 for an offence specified under section 132(5) of CGST Act 2017, [cognizable and non-bailable offences], the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a magistrate within twenty four hours [ section 69(2) of CGST Act ]

Relevant Portion of Section 132(5) of CGST Act 2017 :-

The offences specified in clause (a)or clause (b)or clause (c)or clause (d) of section 132 (1) of CGST Act 2017 and punishable under clause (i) of section 132 (1) of CGST Act 2017 shall be cognizable and non-bailable.

Subject to provisions of CrPC, where a person is arrested for an offence under section 132(4) of CGST Act 2017  [Non-cognizable and bailable offences], he shall be admitted to bail or in default of bail, forwarded to the custody of Magistratesection 69(3)(a) of CGST Act ]

 What is a cognizable offence?

Ans. Generally, cognizable offence means serious category of offences in respect of which a police officer has the authority to make an arrest without a warrant and to start an investigation with or without the permission of a court.

What is a non-cognizable offence?

Ans. Non-cognizable offence means relatively less serious offences in respect of which a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiatedwithout a court order.

Who is required to assist during Arrest under GST

As per the arrest provisions under GST, the following officers have been empowered and are required to assist the CGST / SGST officers in the execution of an arrest under GST:

  • Police
  • Railways
  • Customs
  • Officers of State / UT / Central Government engaged in collection of GST
  • Officers of State / UT / Central Government engaged in collection of land revenue
  • All village officers
  • Any other class of officers as may be notified by the Central/State Government

What are the safeguards provided under CGST /SGST Act for a person who is placed under arrest?

Ans. There are certain safeguards provided under section 69 of CGST Act 2017 for a person who is placed under arrest.

These are:

a. If a person is arrested for a cognizable offence, he must be informed in writing of the grounds of arrest and he must be produced before a magistrate within 24 hours of his arrest;

i. If a person is arrested for a non-cognizable and bailable offence, the Deputy/ Assistant Commissioner of CGST/SGST can release him on bail and he will be subject to the same provisions as an officer in-charge of a police station under section 436 of the Code of Criminal Procedure, 1973;

ii. All arrest must be in accordance with the provisions of the Code of Criminal Procedure,1973 relating to arrest.

Who can release Arrested Person under GST ?

In the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner, shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station [  section 69(3)(b) of CGST Act.]

What are the precautions to be taken during arrest?

Ans. The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating to arrest and the procedure thereof must be adhered to. It is therefore necessary that all field officers of CGST/SGST be fully familiar with the provisions of the Code of Criminal Procedure, 1973.

One important provision to be taken note of is section 57 of Cr.P.C., 1973 which provides that a person arrested without warrant shall not be detained for a longer period than, under the circumstances of the case, is reasonable but this shall not exceed twenty four hours (excluding the journey time from place of arrest to the Magistrate’s court). Within this period, as provided under section 56 of Cr.P.C., the person making the arrest shall send the person arrested without warrant before a Magistrate having jurisdiction in the case.

In a landmark judgment in the case of D.K. Basu v. State of West Bengal reported in 1997 (1) SCC 416, the Hon’ble Supreme Court has laid down specific guidelines required to be followed while making arrests. While this is in relation to police, it needs to be followed by all departments having power of arrest. These are as under:

i. The police personnel carrying out the arrest and handling the interrogation of the arrestee should bear accurate, visible and clear identification and name tags with their designations. The particulars of all such police personnel who handle interrogation of the arrestee must be recorded in a register.

ii. The police officer carrying out the arrest shall prepare a memo of arrest at the time of arrest and such memo shall be attested by at least one witness, who may be either a member of the family of the arrestee or a respectable person of the locality from where the arrest is made. It shall also be counter signed by the arrestee and shall contain the time and date of arrest.

iii. A person who has been arrested or detained and is being held in custody in a police station or interrogation center or other lock up, shall be entitled to have one friend or relative or other person known to him or having interest in his welfare being informed, as soon as practicable, that he has been arrested and is being detained at the particular place, unless the attesting witness of the memo of arrest is himself such a friend or a relative of the arrestee.

iv. The time, place of arrest and venue of custody of an arrestee must be notified by the police where the next friend or relative of the arrestee lives outside the district or town through the Legal Aid
Organization in the District and the police station of the area concerned telegraphically within a period of 8 to 12 hours after the arrest.

v. An entry must be made in the diary at the place of detention regarding the arrest of the person which shall also disclose the name of the next friend of the person who has been informed of the arrest and the names and particulars of the police officials in whose custody the arrestee is.

vi. The arrestee should, where he so requests, be also examined at the time of his arrest and major and minor injuries, if any present on his/her body, must be recorded at that time. The ‘Inspection Memo’ must be signed both by the arrestee and the police officer effecting the arrest and its copy provided to the arrestee.

vii. The arrestee should be subjected to medical examination by the trained doctor every 48 hours during his detention in custody by a doctor on the panel of approved doctors appointed by Director, Health Services of the concerned State or Union Territory, Director, Health Services should prepare such a panel for all Tehsils and Districts as well.

viii. Copies of all the documents including the memo of arrest, referred to above, should be sent to the Magistrate for his record.

ix. The arrestee may be permitted to meet his lawyer during interrogation, though not throughout the interrogation.

x. A police control room should be provided at all district and State headquarters where information regarding the arrest and the place of custody of the arrestee shall be communicated by the officer causing the arrest, within 12 hours of effecting the arrest and at the police control room it should be displayed on a conspicuous notice board.

What are the broad guidelines for arrest followed in CBEC before GST?

Ans. Decision to arrest needs to be taken on case-to- case basis considering various factors, such as, nature and gravity of offence, quantum of duty evaded or credit wrongfully availed, nature and quality of evidence, possibility of evidences being tampered with or witnesses being influenced, cooperation with the investigation, etc. Power to arrest has to be exercised after careful consideration of the facts of the case which may include:

i. to ensure proper investigation of the offence;

ii. to prevent such person from absconding;

iii. cases involving organized smuggling of goods or evasion of customs duty by way of concealment;

iv. master minds or key operators effecting proxy/ benami imports/exports in the name of dummy or non-existent persons/IECs, etc.;

v. where the intent to evade duty is evident and element of mensrea/guilty mind is palpable;

vi. prevention of the possibility of tampering with evidence;

vii. intimidating or influencing witnesses; and

viii. large amounts of evasion of duty or service tax at least exceeding one crore rupees.

Relevant Judgements

Bail to GST evaders issuing fake invoices : CALCUTTA HC Clarify

Related GST Study Material on Arrest

Section 69 CGST Act 2017 ; Power to arrest.

GST Fraud : Two Businessmen arrested for creating fictitious invoices

GST : Inspection , Search, Seizure and Arrest : ICSI : Video

GST Inspection , Search , Seizure and Arrest – Analysis

GST FAQ; Inspection, Search, Seizure and Arrest & 31.3.2017 by CBEC

GST-Inspection, Search, Seizure and Arrest -FAQs on GST by CBEC

 

Direct Taxes Ready Reckoner
Service Tax Ready Reckoner
Company Law Ready Reckoner
tax deduction at source

Leave a Reply

Your email address will not be published. Required fields are marked *