GST arrest power operates independently of assessment, and bail may be refused where prima facie evasion and ongoing investigation exist.

Under the Assam Goods and Services Tax Act, 2017, the power of arrest under section 69 was treated as independent of assessment or adjudication proceedings, so completion of tax determination was not a pre-condition where the statutory threshold for arrest was met. On the materials collected, including alleged issuance of invoices without actual supply and documentary evidence of participation in evasion, the arrest was held not illegal. Bail was also refused because the alleged economic offence was serious, investigation was continuing, and release was considered likely to hamper evidence and further inquiry.

---

---

Issues: (i) Whether the arrest and continued custody of the accused under the Assam Goods and Services Tax Act, 2017 were illegal on the ground that assessment had not been completed and tax liability had not yet been finally determined. (ii) Whether bail should be granted having regard to the statutory power of arrest, the materials collected during investigation, and the Covid-19 based reliance placed on arrest jurisprudence.

Issue (i): Whether the arrest and continued custody of the accused under the Assam Goods and Services Tax Act, 2017 were illegal on the ground that assessment had not been completed and tax liability had not yet been finally determined.

Analysis: The statutory scheme was held to distinguish between the power of inspection, search, seizure and arrest on one hand, and adjudication or assessment of tax liability on the other. The power under section 69 was treated as independent of assessment proceedings, and the Commissioner's power to authorise arrest was linked to a reasoned belief that the person had committed offences falling within section 132(1)(a) to (d), punishable under section 132(1)(i), section 132(1)(ii), or section 132(2). The Court held that prior completion of adjudication or assessment was not a pre-condition for invoking the arrest power where the statutory threshold was satisfied. The materials were found to disclose prima facie involvement in tax evasion above the statutory threshold, including alleged issuance of invoices without actual supply and documentary evidence of active participation in evasion.

Conclusion: The challenge to arrest on the ground that assessment had not been completed was rejected, and the arrest was held not to be illegal.

Issue (ii): Whether bail should be granted having regard to the statutory power of arrest, the materials collected during investigation, and the Covid-19 based reliance placed on arrest jurisprudence.

Analysis: The Court considered the seriousness of the alleged economic offence, the quantum of alleged evasion, the existence of prima facie documentary material, and the continuing investigation. It concluded that the accused was not entitled to bail at that stage because further investigation remained necessary and release was likely to hamper the investigation and affect evidence. The Covid-19 based submissions and the reliance on restrictive arrest principles were not accepted as warranting release on the facts of the case.

Conclusion: Bail was refused.

Final Conclusion: The application for bail was dismissed, with the Court holding that the statutory conditions for arrest were made out and that custody should continue during the pendency of further investigation.

Ratio Decidendi: Under the Assam Goods and Services Tax Act, 2017, the power to arrest for cognizable GST offences operates independently of final assessment proceedings, and bail may be refused where prima facie materials show serious tax evasion and custody is necessary to protect the investigation.

---