Delegated arrest power under GST upheld, while anticipatory bail was refused in a serious input tax credit fraud investigation.

Under the Gujarat GST Act, the power of arrest under section 69 may be exercised by an officer acting under delegated authority, because the statutory scheme permits delegation and the authorised officer may form the required reasonable belief for action. The Court also noted that such arrest action is not dependent on prior adjudication of tax liability or on the FIR and CrPC steps relied on by the applicants, and rejected those objections. On the facts, involving alleged large-scale input tax credit fraud, numerous dummy firms, investigative non-cooperation, and the need for custodial interrogation, the Court declined anticipatory bail because the seriousness of the economic offence outweighed pre-arrest protection.

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Issues: (i) whether the power of arrest under section 69 of the Gujarat Goods and Services Tax Act, 2017 could be exercised by a delegated authority on the basis of reasons to believe; (ii) whether the applicants were entitled to anticipatory bail in the facts of the case.

Issue (i): whether the power of arrest under section 69 of the Gujarat Goods and Services Tax Act, 2017 could be exercised by a delegated authority on the basis of reasons to believe.

Analysis: The statutory scheme permitted delegation of the Commissioner's powers under section 5(3) of the Gujarat Goods and Services Tax Act, 2017. The earlier Division Bench ruling relied upon in the judgment had already held that the authority exercising delegated power may form the requisite reasonable belief for action under section 69, and that such power can be invoked without awaiting adjudication of tax liability. The judgment also followed the view that an authorised officer proceeding under section 69 is not required to follow the provisions governing registration of FIR or the procedural steps under the Code of Criminal Procedure, 1973 in the manner urged by the applicants.

Conclusion: The objection to the arrest power on the ground of lack of delegation, absence of FIR, or non-compliance with the cited CrPC provisions was rejected.

Issue (ii): whether the applicants were entitled to anticipatory bail in the facts of the case.

Analysis: The allegations involved a large-scale input tax credit fraud with transactions through numerous dummy firms and very substantial tax liability. The Court considered the material collected during investigation, the need for custodial interrogation, and the applicants' lack of cooperation despite earlier directions. The Court held that the seriousness of the economic offence and the investigative needs outweighed the plea for pre-arrest protection.

Conclusion: Anticipatory bail was declined.

Final Conclusion: The legal challenges raised by the applicants did not warrant pre-arrest protection, and the applications were rejected in view of the gravity of the alleged GST offence and the need for custodial interrogation.

Ratio Decidendi: Where the statute permits delegation, the authority exercising delegated powers may form the requisite reasonable belief for arrest under section 69, and anticipatory bail may be refused in a serious GST-related economic offence when custodial interrogation is found necessary.

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