TaxTMI 
TaxTMI 
2025 (7) TMI 136
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....itioner under Section 132(1)(b) and Section 132(1)(C) of the Assam Goods and Services Tax Act, 2017; along with a prayer to release the accused/petitioner, namely Shri Varun Goyal, on bail, who has been in custody since 10.06.2025, which in violation of the provisions of Assam Goods and Services Tax Act, 2017. 3. It is submitted by Dr. Saraf, learned Senior Counsel appearing for the petitioner, that the petitioner was arrested on 10.06.2025 in connection with the aforementioned case, allegedly without proper authorization for arrest and without being informed of the specific reasons for the arrest or the necessity thereof and thus, the arrest of the present petitioner is illegal, arbitrary and not sustainable in the eye of law and hence, the petitioner is liable to be enlarged on bail forthwith. He further submitted that the respondent No. 3 had filed a complaint against the petitioner before the learned Chief Judicial Magistrate, Kamrup(M), Guwahati under Section 132(1)(b) & 132 (1)(C) of the Assam Goods and Services Tax Act, 2017 (hereinafter referred to as 'AGST Act, 2017' or 'Act of 2017') praying for judicial custody of the petitioner in connection with Case No. CT/EFN/ARES....
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....y the Hon'ble Supreme Court in Arnesh Kumar Vs. State of Bihar, reported in (2014) 8 SCC 272, and any non-compliance of the same would entitle the accused for grant of bail. 6. Mr. Saraf, learned Senior Counsel, further submitted that the petitioner is running his business from his permanent place of business situated on 67-A, TR Phukan Road, Guwahati, Kamrup(M), Assam. The petitioner also appeared before the authorities whenever he was directed to appear, i.e. on 09.06.2025 & 10.06.2025. The petitioner has neither fabricated any false invoices nor committed any of the acts alleged against him. He is fully cooperating with the enquiry being conducted by respondent Nos. 2 and 3. He further submitted that the allegation, as leveled against him in the instant case, is absolutely false and his arrest by the respondent No. 3 is totally unlawful in the eyes of law and accordingly he prayed to enlarge the petitioner on bail. 7. Dr. Saraf, learned Senior Counsel for the petitioner, further that as per sub- section (4) of Section 132 of the Assam Goods and Services Tax Act, 2017, only those offences specified under clauses (a), (b), (c), or (d) of sub-section (1) and made punishable u....
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....ation of ITC of approximately Rs. 5.3 Crores on the strength of Invoices without actual receipt or supply of goods. However, in the charge, as reflected in the complaint, it is seen that as per analysis and calculation, it does not substantiate a tax evasion exceeding Rs. 5 Crores. Rather, the amount allegedly availed as ineligible ITC stands at approximately Rs. 4.6 Crores. But simply in order to make the offence cognizable and non-bailable, they included the said amount of Rs. 5.3 Crores thereby aggregating the total to Rs. 9.9 Crores solely with intent to arrest the petitioner in connection with this case. 9. Dr. Saraf, learned Senior Counsel, further draws the attention of this Court to Circular No. 171/03/2022-GST dated 06.07.2022, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, wherein it is clarified that in cases where there is no actual supply of goods or services in respect of a transaction, no tax is payable on such transaction, and consequently, no demand or recovery can be made in respect of input tax credit (ITC) wrongly or fraudulently availed in such cases. It has been specifically clarif....
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....pliance of Section 41 of the Code is mandatory in nature. But, in the instant case, there is no compliance of Section 41-A of the Code of Criminal Procedure, 1973 and the respondent No. 3 had arrested the petitioner on 10.06.2025 without issuing any notice under Section 35(3) of BNSS, corresponding to Section 41-A of Cr.P.C. before making any such arrest. He further submitted that in the above referred case of Radhika Agarwal (supra), the Hon'ble Apex Court also held that exercise should be undertaken in right earnest and objectively, and not on mere ipse dixit without foundational reasoning and material. It has also been observed that arrest cannot be made to merely investigate whether the conditions are being met under Section 132 of the GST Act and the arrest is to be made on the formulation of the opinion by the Commissioner that ingredients of Section 132 of the GST Act are made out which is to be duly recorded in the "reasons to believe". Mr. Saraf further submitted that in case of Radhika Agarwal (supra), it has also been held that the CGST Act, 2017 is not a complete Code when it comes to the provisions of arrest for the provisions of the Code of Criminal Procedure, 1973 wo....
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....king recourse to artifices and strategies. The public interest in ensuring the due investigation of crime is protected by ensuring that the inherent power of the High Court is exercised with caution. That indeed is one - and a significant - end of the spectrum. The other end of the spectrum is equally important: the recognition by Section 482 of the power inhering in the High Court to prevent the abuse of process or to secure the ends of justice is a valuable safeguard for protecting liberty. The Code of Criminal Procedure of 1898 was enacted by a legislature which was not subject to constitutional rights and limitations; yet it recognized the inherent power in Section 561A. Post- Independence, the recognition by Parliament 37 of the inherent power of the High Court must be construed as an aid to preserve the constitutional value of liberty. The writ of liberty runs through the fabric of the Constitution. The need to ensure the fair investigation of crime is undoubtedly important in itself, because it protects at one level the rights of the victim and, at a more fundamental level, the societal interest in ensuring that crime is investigated and dealt with in accordance with law. On....
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....a (2021 SCC Online Bom 200) 7. Daulat samirmal Mehta v. Union of India [(2025) 139 GSTR 165: 2023 SCC Online SC 2345] 8. Sunil Kamar Jha Cs UNION Of India [(2021 SCC Online Bom 14101: (2021) 50 GSTL 237)] 9. Makemttrip (India) Pvt. Ltd. Vs Union of India & Ors. [2016 SCC Onilne Del 4951] 10. Union of India Vs Makemttrip (India) Pvt. Ltd. Vs Union of India [(2019) 11 SCC 765] 11. Arnesh Kumar vs State of Bihar and Anr. [(2014) 8 SCC 273] 12. Satender Kumar Antil vs Central Bureau of Investigation and Anr. [(2022) 10 SCC 51] 13. Commissioner of Income Tax, Mumbai vs Amitabh Bachchan [(2016) 11 SCC 748] 14. Jati parshad vs State of Hryana [1993 Supp (2) SCC 297] 15. Calcutta Discount Co. Ltd. v. ITO, [(1961) 41 ITR 191: 1960 SCC Online SC 10] 16. Madhya Pradish Industries Ltd. Vs ITO [(1965) 57 ITR 637] 17. M.P. Industries Ltd. v. ITO, [(1970) 2 SCC 32] 18. P.V. Ramana Reddy Vs Union of India, Ministry of Finance, Department of Revenue, Reoresented by Secretary [(2020 SCC Online TS 472] 19. Deep Jyoti Nath Vs. State of Assam, [(2023 SCC Online Gau 667)] 16. Citing th....
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....nesses and also admitted that the tax invoices, issued by him, amounted to Rs. 5,26,39,756.86/- and he also admitted that his statement was ready over and explained to him at the time of recording. He accordingly raised objection and submitted that it is not a fit case to grant bail to the present petitioner at this stage as the case is still under investigation. He further submitted that he needs some more time to submit on the merits of the criminal petition and will also file objection in that regard. 19. In reply, Dr. Saraf, learned Senior Counsel for the petitioner, submitted that as per Section 69 of CGST Act, an arrest can be made only when the Commissioner has "reasons to believe" that a person has committed an offence specified in clauses (a), (b), (c) or (d) of sub-section (1) of Section 132 of the Act. But, here in the instant case, it is the admitted position that the "reasons to believe" has not been recorded by the Commissioner nor it was supplied to the present petitioner. Dr. Saraf further submitted that the accused is in custody for last 15 days and no prayer for his further custodial interrogation has been made and therefore, his custodial detention may not be ....
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.... recorded before issuing authorization letter of arrest. As held by the Hon'ble Supreme Court in case of Radhika Agarwal (supra), the requirement of furnishing the "reasons to believe" to the arrestee is not a mere formality but a substantive safeguard, enabling the person concerned to challenge the legality of the arrest in accordance with law. But, here in the instant case, though it is stated that the "reasons to believe" were duly recorded by the competent authority prior to issuance of the authorization to arrest, but there is nothing on record to show that the same were communicated to the petitioner either at the time of arrest or along with the grounds of arrest. Such non-communication of foundational reasons vitiates the process and undermines the safeguards guaranteed under law, rendering the arrest procedurally infirm. 24. From the submission made by Mr. Gogoi, learned Additional Advocate General, Assam and Standing Counsel, Finance and Taxation Department, as well as from the statement made by the accused/petitioner before the investigating authority on 09.06.2025 and 10.06.2025, it appears that the petitioner's contention regarding non-service of notice under Sectio....