2025 (1) TMI 1301 - DSC - GST

CGST Act Section 69 arrests must comply with CrPC Section 41/41A mandatory procedures despite prosecution claims

CGST Versus Yogesh Gupta.

Gurugram CJM Court held that arrest under Section 69 of CGST Act, 2017 for offense punishable up to 5 years must comply with Section 41/41A of Cr.P.C. ... Application for seeking judicial remand under Section 167 of Cr.P.C. read with Section 187 of BNSS Act, 2023 for 14 days - ground of arrest were not informed in proper manner - HELD THAT:- This Court has gone through the grounds of arrest, which were conveyed by the prosecution to the accused. It is pertinent to mention here that on arrest memo, it has been acknowledged by the accused himself in writing that he has been informed and explained about the grounds of arrest. Therefore, this Court is of the view of that ground of arrest have been properly informed and explained to the applicant/accused by the prosecution. It is correct that present offence under Section 132(1) of CGST Act, 2017 is punishable upto 5 years. Hon'ble Apex Court in case law titled as Arnesh Kumar. Vs. State of Bihar [2014 (7) TMI 1143 - SUPREME COURT] made it mandatory to follow the provisions of Section 41 & 41A of Criminal Procedure Code for the offence which are punishable upto 7 years. Prosecution has taken a stand that present accused has been arrested under Section 69 of CGST Act and hence, provision of Section 41 and 41A of Criminal Procedure Code/35 of BNSS Act are not applicable in the present matter but this Court does not find force in the arguments of learned counsel for the complainant. Further in case law titled as The State of Gujarat etc. Vs. Choodamani Parme Shwaran Iyer and another [2023 (7) TMI 1008 - SUPREME COURT], Hon'ble Apex Court has observed that contention of prosecution that in view of Section 69(3) of CGST Act, 2017, petitioners cannot fall back upon the limited protection against arrest, found in Sections 41 and 41A of Cr.P.C., may not be correct. Conclusion - This Court is of the view that prosecution was under obligation to comply with the provisions of Section 41, 41A of Cr.P.C/35 of BNSS Ac, 2023 before arresting the accused but same has not been complied and as such, arrest of accused cannot be termed as legal. In view of the matter, the application filed on behalf of applicant/accused Yogesh Gupta is hereby allowed. Accordingly, applicant/accused Yogesh Gupta is released from custody forthwith. However, prosecution/complainant department is given liberty to re-arrest the applicant/accused after following the due procedure as described in Section 41, 41A of Cr.P.C./35 of BNSS Act, 2023/70 (1) of CGST Act. Application allowed. ISSUES PRESENTED and CONSIDEREDThe central issues considered in this judgment are:
Whether the grounds of arrest were properly communicated to the accused, Yogesh Gupta, in accordance with legal requirements.
Whether the arrest of the accused under Section 69 of the CGST Act was lawful, considering the applicability of Sections 41 and 41A of the Criminal Procedure Code (Cr.P.C.) and Section 35 of the BNSS Act, 2023.
Whether the procedural safeguards provided under Sections 41 and 41A of Cr.P.C. were applicable to the arrest made under the CGST Act, 2017.
ISSUE-WISE DETAILED ANALYSISCommunication of Grounds of ArrestThe accused contended that the grounds of arrest were not properly communicated and that the prosecution merely completed a formality. The Court examined the arrest memo and noted that the accused had acknowledged in writing that he was informed and explained the grounds of arrest. The Court concluded that the grounds of arrest were indeed properly communicated to the accused.Legal Framework and Applicability of Sections 41 and 41A of Cr.P.C.The accused argued that the compliance with Sections 41 and 41A of Cr.P.C. was necessary as the offence under Section 132(1) of the CGST Act, 2017, is punishable by up to five years, which falls under the purview of these sections. The prosecution argued that the arrest was made under a special act, CGST, and thus, the provisions of Sections 41 and 41A of Cr.P.C. were not applicable.The Court referred to precedents, including the case of Akhil Krishan Maggu vs. Deputy Director, where it was held that the provisions of the CGST Act are not exclusive of Cr.P.C. The Court also cited the decision in The State of Gujarat vs. Choodamani Parme Shwaran Iyer, where the Supreme Court observed that the protections against arrest found in Sections 41 and 41A of Cr.P.C. could not be disregarded under the CGST Act.Interpretation and ReasoningThe Court reasoned that the CGST Act does not exclude the application of Cr.P.C. provisions. It highlighted that Section 69(3) of the CGST Act, which relates to the grant of bail, does not negate the procedural safeguards provided by Sections 41 and 41A of Cr.P.C. The Court emphasized the necessity of issuing a notice under Section 41A of Cr.P.C. before arresting an individual for offences punishable with imprisonment not exceeding seven years, unless the conditions specified in the section are met.Application of Law to FactsThe Court found that the prosecution failed to comply with the procedural requirements of Sections 41 and 41A of Cr.P.C. before arresting the accused. The Court held that the arrest was not carried out in a legal manner due to this non-compliance.Treatment of Competing ArgumentsThe prosecution's argument that the special provisions of the CGST Act overrode the requirements of the Cr.P.C. was not accepted by the Court. The Court maintained that the procedural safeguards in the Cr.P.C. are applicable, and the prosecution was obliged to adhere to them.ConclusionsThe Court concluded that the arrest of the accused was not legal due to the non-compliance with Sections 41 and 41A of Cr.P.C. Consequently, the accused was ordered to be released from custody. However, the prosecution was granted the liberty to re-arrest the accused after following the due procedure as prescribed by law.SIGNIFICANT HOLDINGSThe Court held that:
'The prosecution was under obligation to comply with the provisions of Section 41, 41A of Cr.P.C/35 of BNSS Act, 2023 before arresting the accused but same has not been complied and as such, arrest of accused cannot be termed as legal.'
The procedural safeguards in Sections 41 and 41A of Cr.P.C. are applicable even under the CGST Act, and failure to comply with these safeguards renders the arrest illegal.
The accused, Yogesh Gupta, was to be released from custody, with the prosecution having the option to re-arrest following the correct legal procedures.