Section 69 and 132

[Rajesh Kumar]

“69. Power to arrest. (1) Where the Commissioner has reasons to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer of central tax to arrest such person.

sir/ madam

Please enlight whether department can arrest a person , if duty evasion as per department is more than on account of

1. ITC availed after the time limit given under Section 16(4).ITC > 5 cr

2. ITC availed but payment to venders not made with 180 day. ITC involved is more than 5 crores.

3. ITC availed however the same was blocked under Section 17(5). ITC > 5 cr

4. ITC wrongful availed other than the the reasons given in clause a,b,c and d of Sub Section 2 of Section 132 and ITC > 5crs.

5. 2A and 3B difference.

6.ITC availed through Tran-1 later on department declares the same wrongly availed.

[Amit Agrawal]

For the purpose of my views, it is my presumptive understanding that none of the situations described by you falls under the category of Section 132 (1) (c) (i.e. avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill) or under Section 132 (2).

And if so, in none of the situations, Dept. can arrest the concerned assessee u/s 69 (1), in my humble view.

However, this does not mean that concerned assessee cannot be prosecuted and sent to jail if proven guilty.

These are strictly personal views of mine and the same should not be construed as professional advice / suggestion.

[Rajesh Kumar]

Sir, when there is no provisions in the Act, then how assessee can be prosecuted and sent to jail if proven guilty for the duty evaded but not covered under the clause a,b,c and d of subsection 2 of section 132 ?

Please explain, what are other aspects?

[Amit Agrawal]

Kindly refer to Section 132 (1) which reads as follows:

132. (1) 1[Whoever commits, or causes to commit and retain the benefits arising out of, 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;

2[(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill;]

(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;

(e) evades tax 3[****] or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);

(f) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information with an intention to evade payment of tax due under this Act;

(g) obstructs or prevents any officer in the discharge of his duties under this Act;

(h) acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder;

(i) receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder;

(j) tampers with or destroys any material evidence or documents;

(k) fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information; or

(l) attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (k) of this section,

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;

(iii) in the case of any other offence 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 one hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for a term which may extend to one year and with fine;

(iv) in cases where he commits or abets the commission of an offence specified in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which may extend to six months or with fine or with both.

[Amit Agrawal]

Arrest for specified offenses u/s 69 & prosecution for offenses listed u/s 132 are two different things.

Just because one cannot be arrested u/s 69 OR is not arrested, does not necessarily mean that he cannot be prosecuted u/s 132.

If Commissioner feels that anyone has committed any of the offenses listed u/s 132, exceeding monetary limits prescribed, he can always sanction to prosecute such person. and if proven guilty by court, such person can be sent to jail.

[Amit Agrawal]

In the context under discussion, kindly note the following provisions from Section 132:

Sub-clause (e) of Section 132 (1):

"evades tax 3[****] or fraudulently obtains refund and where such offence is not covered under clauses (a) to (d);"

"Explanation" to Section 132:

"Explanation.- For the purposes of this section, the term “tax” shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act."

[Amit Agrawal]

Dear Shri Rajesh Kumar Ji,

I hope I resolved all your doubts shared in Post No. 2 above.

If not, please let me know along-with reasons / cause of more doubts.

AI Summary

Power to arrest under GST limited to specified offences; prosecution remains possible where conduct fits penal descriptions. Power to arrest under GST is confined to specified listed offences that meet statutory monetary thresholds; alleged wrongful availment of input tax credit in the described factual scenarios does not automatically attract arrest unless the conduct maps to the enumerated offences involving invoice falsity, fraudulent avails or similar misconduct. Arrestability is distinct from the ability to prosecute: even absent arrest, the Commissioner may sanction prosecution where the conduct constitutes a penal offence or falls within the residual tax evasion limb and the monetary seriousness criteria are met.