TaxTMI 
TaxTMI 
2026 (5) TMI 1015
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....posal. 2. Issue Rule, returnable forthwith. Mr Utkarsh Sharma, learned Additional Public Prosecutor waives service of notice of Rule for respondent no.1 and Mr Tirth Nayak, learned advocate waives service of notice of Rule for respondent nos.2 and 3. 3. Mr Virat G. Popat, learned Advocate, at the outset, submitted that the challenge is restricted qua the action of the respondent in not strictly following the provisions of section 69 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the Act of 2017") inasmuch as, the Commissioner has not recorded the reasons to believe and if recorded, the same are not supplied to the petitioner. It is a condition precedent that the Commissioner must record his reasons to believe before authorizing the arrest and absence of the formation of the reasons to believe, strikes at the root of the jurisdiction, rendering the arrest illegal. It is further submitted that the reasons to believe, which is purported to be supplied, is not signed by the Commissioner but some another officer who might have been authorized. 3.1 Reliance is placed on the judgment in the case of Radhika Agarwal v. Union of India reported in (2025)....
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....be challenged by the accused and examined by the Court. The Apex Court has held and observed that it would not be proper to hold that the accused can be denied and not furnished a copy of 'the reasons to believe', considering the fact that it would prevent the accused from challenging the arrest and questioning the reasons to believe. It is therefore submitted that supply of the reasons to believe, to the arrestee to enable him to exercise the right to challenging the arrest is a sine qua non. 3.4 It is submitted that the language of sub-section (1) of section 19 of the PML Act and the language contained in section 69 of the Act of 2017, are in pari materia with and hence, the principle laid down in the above-referred two judgments applies to the facts of the present case as this Court is examining the action of the Commissioner in light of section 69 of the Act of 2017 inasmuch as, in the case of Radhika Agarwal v. Union of India (supra), the Apex Court was dealing with the controversy regarding the power to arrest under the Act of 1962 and the Act of 2017. Exception is carved out in favour of the department to claim redaction and exclusion of specific particulars and details; ....
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....wari v. State of Gujarat passed in Special Criminal Application (Habeas Corpus) no.15962 of 2025. Reference is made to the judgment of the Apex Court in the case of V. Senthil Balaji v. State reported in (2024) 3 SCC 51, wherein it is observed that a writ of Habeas Corpus shall only be issued when the detention is illegal. As a matter of rule, an order by a judicial officer culminating into a judicial function, cannot be challenged by way of a writ of Habeas Corpus, while it is open to the person aggrieved to seek other statutory remedies. It is submitted that it is true that when there is a non-compliance of the mandatory provisions, exception is carved out for entertaining a writ of Habeas Corpus and that too, by way of a challenge. Reliance is also placed on the judgment in the case of Saurabh Kumar v. Jailor, Koneila Jail reported in (2014) 13 SCC 436. The Apex Court, has observed that the writ of Habeas Corpus, is no substitute for enlargement of the arrestee from custody. 4.2 While adverting to the submission made as regards scope of section 69 of the Act of 2017, it is submitted that the requirements contained therein, are three fold; namely, (i) that the Commissioner him....
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.... Accordingly, search was carried out followed by recording of the statement of the authorized person and it connected the petitioner. Therefore, on 19.03.2026, on the basis of the material available on the record, the Additional Director General has recorded the 'reasons to believe' and the concerned officer, was authorized. The 'reasons to believe' were provided on 19.03.2026 that is duly received by the petitioner and in lieu thereof the petitioner has put his signature, further indicating that the contents have been explained to him in Hindi language. Therefore, to say that the 'reasons to believe' as signed by the Additional Director General is not supplied, would be incorrect. 5. Mr Utkarsh Sharma, learned Additional Public Prosecutor, submitted that it is nobody's case that the 'reasons to believe' are not supplied. The issue, is as to whether the author of the 'reasons to believe' himself has supplied it or it is supplied by somebody else. Reliance is placed on the judgment in the case of Arvind Kejriwal v. Directorate of Enforcement (supra). It is submitted that the significance of the 'reasons to believe' had come into picture by way of the judicial pronouncement dealin....
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....ious facets, namely, arrest, detention and offences etc., depending upon the stake involved and for which purpose, officers are designated to exercise the powers and it would not be permissible to the officers to delegate those powers to the other officers instead exercising himself. It is submitted that variation in recording the 'reasons to believe' would be impermissible as the slight variation is likely to enure different result. Therefore, it is inevitable that the reasons of belief recorded by the designated officer is provided verbatim to the arrestee with no addition or subtraction, facilitating independent examination by the learned Judicial Magistrate First Class, while passing the order of remand or otherwise. It is next submitted that furnishing the 'reasons to believe' to the arrestee, serves twofold purposes, namely, offering opportunity to the arrestee to challenge the same before higher forum and facilitating authorized detention by the learned Judicial Magistrate First Class. It is further submitted that the requirement, is to supply the 'copy' whereas, in the case on hand, what is supplied cannot be said that the copy of the 'reasons of belief' is su....
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....hich are patently routine, mechanical and not in conformity with the obligations/duties cast on the Remand Court; in connection with File No DGGI/INV/GST/2112/2025-Gr-B C. As a sequel and consequence of the prayers (ibid.), direct the forthwith release of the petitioner from custody as his fundamental rights under Articles 21 as well as 22 (1) & (2) of the Constitution, along with the sacrosanct provisions of Cr.PC, 1973 and BNSS, 2023, stand blatantly infringed and violated; D. As an interim/ad-interim measure, this Hon'ble Court may be pleased to direct the release of the Petitioner from custody on such terms and conditions that this Hon'ble Court may deem fit and appropriate; E. Pass any such other order(s) or further direction(s) as this Hon'ble Court may deem fit in the interest of justice." 9. Pertinently, the challenge raised by the petitioner is to declare the entire exercise leading to the petitioner's arrest by the respondent and remand proceedings by the Chief Judicial Magistrate to be wholly untenable, illegal, arbitrary and unconstitutional. The petitioner has also challenged his arrest and subsequent incarceration by way of th....
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....the officers of DGGI at the residence of the petitioner, one industrial unit and two other premises, followed by recording of the statements of incharge, proprietor, authorized signatory etc. of the respective units and premises. Statement of the petitioner was also recorded on 18.03.2026 under section 70 of Act of 2017. As a result of the investigation conducted, according to the DGGI, the petitioner was instrumental and beneficiary of the fake invoicing racket through M/s AAI Metalics, Jamnagar and M/s Shakti International, Jamnagar being used as a proxy for the purpose of availing and passing on of a fake ITC without actual receipt/supply of goods. The total fraudulent ITC passed on was amounting to Rs.10.39 crores without supply of goods by M/s AAI Metalics, Jamnagar for the period from April 2024 and November 2025 and Rs.4.03 crores fradulent ITC claimed by M/s Shakti International, Jamnagar. The DGGI on the basis of the records and preliminary investigation, noticed that the petitioner was personally involved in availment of the fake ITC on the basis of invoices issued by non-operational firms and received monetary considerations leading to the evasion of the Goods and Servic....
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....nd hence, there is no requirement under the law of providing verbatim 'reasons to believe' to the petitioner. The 'reasons to believe' has been furnished and hence, there is a sufficient compliance of the principle laid down by the Apex Court in the case of Arvind Kejriwal v. Directorate of Enforcement (supra) and Radhika Agarwal (supra). Contention is also raised by the respondents regarding maintainability and/or entertainability of the captioned writ petition. 14. Before adverting to the contention raised by the petitioner that by not following the statutory mandate as contained in section 69 of the Act of 2017 the arrest/detention is illegal, this Court, may deal with the issue regarding the maintainability and entertainability of the writ petition, seeking writ of Habeas Corpus. It need not detain the Court any longer, as the matter is well-settled by the following judgments of the Apex Court and this Court. 15. In the case of V. Senthil Balaji v. State represented by the Deputy Director (supra), the Apex Court, has laid down the proposition pointing out the difference between a detention becoming illegal for not following the statutory mandate and wrong or inadequate re....
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....uld be maintained in respect of a person who is in police custody pursuant to a remand order passed by the jurisdictional Magistrate in connection with the offence under investigation, this issue has been considered in Saurabh Kumar v. Jailor, Koneila Jail, (2014) 13 SCC 436 : (2014) 5 SCC (Cri) 702 and Manubhai Ratilal Patel v. State of Gujarat, (2013) 1 SCC 314 : (2013) 1 SCC (Cri) 475 . It is no more res integra. In the present case, admittedly, when the writ petition for issuance of a writ of habeas corpus was filed by the respondent on 18-3-2018/19-3- 2018 and decided by the High Court on 21-3-2018 Tasneem Rizwan Siddiquee v. State of Maharashtra, 2018 SCC OnLine Bom 2712 her husband Rizwan Alam Siddiquee was in police custody pursuant to an order passed by the Magistrate granting his police custody in connection with FIR No. I-31 vide order dated 17-3-2018 and which police remand was to enure till 23-3-2018. Further, without challenging the stated order of the Magistrate, a writ petition was filed limited to the relief of habeas corpus. In that view of the matter, it was not a case of continued illegal detention but the incumbent was in judicial custody by virtue of an order ....
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....it of Habeas Corpus may be entertained, provided a challenge is specifically made. However, an order passed by a Magistrate giving reasons for a remand can only be tested in the manner provided under the statute and not by invoking Article 226 of the Constitution of India, 1950. There is a difference between a detention becoming illegal for not following the statutory mandate and wrong or inadequate reasons provided in a judicial order. While in the former case a writ of Habeas Corpus may be entertained, in the latter the only remedy available is to seek a relief statutorily given. In other words, a challenge to an order of remand on merit has to be made in tune with the statute, while noncompliance of a provision may entitle a party to invoke the extraordinary jurisdiction. In an arrest under Section 19 of the PMLA, 2002 a writ would lie only when a person is not produced before the Court as mandated under subsection (3), since it becomes a judicial custody thereafter and the concerned Court would be in a better position to consider due compliance. 38. The Learned PP however sought to rely upon the judgment rendered in the case of Saurabh Kumar through his Father v. Jailo....
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....ed under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate; (b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station." 18. Sub-section (1) of section 69 of the Act of 2017 provides for recording of 'reasons to believe' by the Commissioner, that the person has committed an offence and is punishable under the provisions of the Act of 2017 as specified therein, coupled with passing of the order authorizing any officer to arrest such person. Recording of reasons to believe is a sine qua non for satisfying the elements prescribed therein. 19. In the case on hand, the issue revolves around the language contained in sub-section (1) of section 69 of the Act of 2017 which is more or less in pari materia with the provisions of sub-section (1) of section 19 of the PML Act so also sub-section (1) of section 104 of the Act of ....
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....elieve' there has to be foundational reasoning and the material satisfying the conditions enumerated in section 132 and it would be incumbent upon the Commissioner to satisfactorily show vide the 'reasons to believe' recorded by him that the person, to be arrested, has committed a non-bailable offence. Paragraphs 31 to 33, 39, 40, 44, 52, 56, 57 and 60 are reproduced hereinbelow for ease of reference: "31. In Arvind Kejriwal (supra), a combined reading of Pankaj Bansal v. Union of India and Others, 2023 SCC OnLine SC 1244/[2023] 155 taxmann.com 39 (SC), Prabir Purkayastha v. State (NCT of Delhi) (2024) 7 SCC 576/[2024] 162 taxmann.com 539 (SC) and Vijay Madanlal Choudhary v. Union of India 2022 SCC OnLine SC 929/[2022] 140 taxmann.com 610 (SC) was adopted by this Court. It was held that the power to arrest a person without a warrant and without instituting a criminal case is a drastic and extreme power. Therefore, the legislature had prescribed safeguards in the language of Section 19 itself which act as exacting conditions as to how and when the power is exercisable. These safeguards include the requirement to have "material" in the possession of DoE, and on the basis of ....
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....stify redaction would be on the DoE. The officers of the DoE are the authors of the "reasons to believe" and can use appropriate wordings, with details of the material, as are necessary in a particular case. As there may only be a small number of cases where redaction is justified for good cause, this reason is not a good ground to deny the accused's access to a copy of the "reasons to believe" in most cases. Where the nondisclosure of the "reasons to believe" with redaction is justified and claimed, the court must be informed. The file, including the documents, must be produced before the court. Thereupon, the court should examine the request and if they find justification, a portion of the "reasons to believe" and the document may be withheld. This requires consideration and decision by the court. DoE is not the sole judge. 43. Section 173(6) of the Code, permits the police officer not to furnish statements or make disclosures to the accused when it is inexpedient in public interest. In such an the police officer is to indicate the specific part of the statement and append a note requesting the Magistrate to exclude that part from the copy given to the accused.....
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....tween Section 19(1) and Section 104(1), is twofold: first, Section 104(1) does not explicitly stipulate the requirement of a customs officer having "material in their possession"; and second, Section 104(1) does not explicitly state that the customs officer must reasonably believe that the arrestee is "guilty of an offence". Instead, Section 104(1) states that the customs officer must have "reasons to believe" that the arrestee has "committed an offence". 44. Thirdly, given the framework of the Customs Act, which explicitly classifies offences into bailable and non-bailable, as well as cognizable and non-cognizable, the "reasons to believe" must reflect these classifications when justifying an arrest. The reasoning must weigh in why an arrest is being made in a specific case, particularly given the specific severity assigned to the offence by the legislature. The reasoning must also state how the monetary thresholds outlined in the Act are met. Subclauses (b) to (d) of Section 104(4) provide monetary thresholds for cognizable offences, while subclauses (a) and (c) to (e) of Section 104(6) provide those for non-bailable offences. The "reasons to believe" must include a comp....
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.... cannot be made to merely investigate whether the conditions are being met. The arrest is to be made on the formulation of the opinion by the Commissioner, which is to be duly recorded in the reasons to believe. The reasons to believe must be based on the evidence establishing to the satisfaction of the Commissioner that the requirements of sub-section (5) to Section 132 of the GST Act are met. 60. The findings and the ratio recorded in paragraphs 30 to 47 above with reference to the Customs Act would equally apply insofar as maintenance of records as well as obligations of the arresting officer and rights of the accused/person arrested are concerned. Compliance in this regard must be made." 21. It is noteworthy that in paragraph 60, the Apex Court, has clearly stated that the findings and the ratio recorded in paragraphs 30 to 47 of the judgment with reference to the Act of 1962 would equally apply insofar as maintenance of records as well as obligations of the arresting officer and rights of the accused/persons arrested. 22. In this behalf, apt would be the judgment of the Apex Court in the case of Arvind Kejriwal v. Directorate of Enforcement (supra). The Apex Cou....
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....tion in most cases. DoE may claim redaction and exclusion of specific particulars and details. However, the onus to justify redaction would be on DoE. The officers of DoE are the authors of the "reasons to believe" and can use appropriate wordings, with details of the material, as are necessary in a particular case. As there may only be a small number of cases where redaction is justified for good cause, this reason is not a good ground to deny the accused's access to a copy of the "reasons to believe" in most cases. Where the nondisclosure of the "reasons to believe" with redaction is justified and claimed, the court must be informed. The file, including the documents, must be produced before the court. Thereupon, the court should examine the request and if they find justification, a portion of the "reasons to believe" and the document may be withheld. This requires consideration and decision by the court. DoE is not the sole judge. 43. Section 173(6) of the Code, permits the police officer not to furnish statements or make disclosures to the accused when it is inexpedient in public interest. In such an event, the police officer is to indicate the specific part of the....
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....estee to enable him to exercise his right to challenge the validity of the arrest. Exception is carved out in paragraph 42 of the judgment in the eventuality of non-feasibility to reveal the material, by claiming redaction and exclusion of a specific particulars and details, with a rider that such a position would not be in most cases. Therefore, it is well-settled that when it comes to violation of personal liberty, the 'reasons to believe', recorded, should be furnished to the arrestee so as to enable him to exercise his right to challenge the validity of the arrest. 24. Essentially, the contention raised by the petitioner, is that the verbatim copy of the 'reasons to believe' as signed by the Commissioner is not provided and the so-called 'reasons to believe' provided to the petitioner is signed by the respondent no.3, who is not competent as per the provisions of the Act of 2017. In support of such contention, ground is raised that formation of 'reasons to believe' by the Commissioner is absent in the present case and the document purportedly containing 'reasons to believe' is not signed, recorded or approved by the Commissioner, but instead is signed by the arresting office....