TaxTMI 
TaxTMI 
2026 (7) TMI 581
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.... is pending on the file of Hon'ble Special Court for Economic Offences, Bangalore City as abuse of process of law insofar as petitioner is concerned. 2. To issue a writ of certiorari or writ or order or direction of appropriate writ in nature and quash the arrest of petitioner dated 16-09-2025 and consequent order of remand order dated 16-09-2025 (as per Annexure-'F') passed by Hon'ble Special Court for Economic Offences, Bangalore in Crime No. 34/2025 in File No. DGGI/INV/125/ 2025-Gr-C-01 O/o Pr-ADG-DGGI-ZU - Bangalore as illegal and consequently release the petitioner forthwith insofar as petitioner is concerned. 3. To issue a writ of certiorari or a writ or order of direction of appropriate in nature and quash the order of cognizance dated 25-11-2025 (as per Annexure-F) passed in PCR No. 280 of 2025 on the file of Hon'ble Special Court for Economic Offences, Bangalore which is in Crime No. 34/2025 in File No. DGGI/INV/125/ 2025-Gr-C-01 O/o Pr-ADG-DGGI-ZU - Bangalore (as per Annexure-H), as illegal and abuse of process of law insofar as petitioner is concerned. 4. To pass such other order or orders as this Hon'ble Court deems fit to grant in the facts ....
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....used and his family by the Directorate General of GST Intelligence ('DGGI') for showing complete non-cooperation and obstructing the proceedings. 3.4. On 15-09-2025, the accused is asked to be present before the 1st respondent for interrogation. The accused then travels from Mangalore to Bangalore for the purpose of personal interrogation and is taken into custody the moment he reaches the Airport at Bangalore. Before the petitioner was taken into custody, the officers conducted a search on him and recovered from him 6 mobile phones and one laptop and arrested him at 6.30 a.m. on 16-09-2025. At about 8.55 p.m. on 16-09-2025, the accused was produced before the Court of Economic Offences, Bangalore along with the remand application. On 13-11-2025, the 1st and 2nd respondents file the prosecution complaint before the jurisdictional Court under Section 223 of the BNSS for offences punishable under Sections 132(1)(b), 132(1)(c), 132(1)(f) r/w 134 and 135 of the Act. The present petition is then preferred seeking to quash the proceedings in the private complaint so registered against the petitioner and hold the arrest of the petitioner to be illegal. The challenge is on the score tha....
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....ed by the GST authorities were placed before the Competent Authority, who after going through the intelligence developed by the concerned officer, issued authorization for search, and based on the authorization, search was conducted in the premises of the petitioner and allied concerns. The accused never showed any cooperation with the investigation and had fled the premises when search and seizure proceedings were being conducted. The accused was duly served the grounds of arrest and reasons for arrest in writing, which has been acknowledged by the petitioner and the mother of the petitioner/accused was also informed of his arrest. 5.2. Learned counsel would submit that whether parallel proceedings are being conducted by the State and the Central GST authorities cannot be determined now at the stage of investigation. The State GST authorities may have been inquiring into the discrepancies in the GST payment. Respondent Nos. 1 and 2 are enquiring into the larger supply chain where around 140 suppliers are involved multi-fold revenue is at stake. Therefore, the two though may arise on the same facts, but for different reasons, which will be known only on completion of investigati....
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...., Kesare Village, Kasaba Hobli, Mysuru-570007 Email: [email protected] | Contact: 9110247185 Respected Sir, Subject: Submission of records/books evidencing in response to Summons u/s 70 of CGST/KGST Act, 2017 - RFN: MA290725018233X, dated 04.07.2025. With respect to the subject sited above, in the process of enquiry I attended on the date 10-07-2025 scheduled and I have given all the explanations in response to the enquiry made by you. But due to short duration I couldn't evident the documents called for by your goodself. I hereby submitting the following books of accounts/records pertaining to M/s. M K Traders, GSTIN: 29IRZPK8080E1ZT for the following periods available as on today and other related records will be submitted as soon as our auditor arrives who is out of station. 1. Inward supply invoices & E-Way bills from October-2021 to December-2021 and October-2024 to June-2025. 2. Outward supply invoices & E-Way bills from Februry-2021 to December-2021 and October-2024 to June-2025. 3. Copies of Weighment slips and LR for outward supplies from October-2024 to June-2025. 4. Bank statemen....
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....raders are involved in availing and passing on of inadmissible Input Tax Credit (ITC) on the strength of invoices issued by fictitious entities without associated supply of goods and/or services. As per the data available in the GST portal the commodity transacted by these entities is predominantly 'ferrous scrap'. Discreet enquiries have revealed that majority of the premises pertaining to these entities are either non-existing or non operational. The GSTINs of majority of the impugned entities are cancelled suo moto ab-inition by the department which further consolidates the suspicion of their involvement in fictitious transactions for availing and passing on inadmissible ITC on the strength of fake invoices. Analysis of the GST returns and corresponding E-waybills filed by the entities indicates that in majority of the cases the vehicle movement details are not available. It is also observed in certain cases that the vehicle was found to be moving on a different route other than the appropriate route for the E-waybill in which the said vehicle has been used. The quantum of evasion of GST by these taxpayers cumulatively amounts to over One Hundred Crores. The investigatio....
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....raders. b. GSTR2A returns of this TP indicates that they have availed input tax credit of Rs. 37,85,64,955/- from various suppliers, out of which Rs. 29,76,30,325/- has been received from suppliers which are Suo-moto cancelled/ or cancelled on application of taxpayer and Rs.8,09,34,629/- has been received from the suppliers whose GSTIN is Active but most of the suppliers at Level-2 (inward supply) are found to be cancelled by the department or cancelled by the taxpayer on application within a brief period after obtaining registration. c. It is pertinent to mention here that amongst the Active Suppliers of M/s U.K. Steel Traders, suppliers viz. 5star Traders (GSTIN-29FCZPA6147JIZU), RMS Enterprises (GSTIN-29BOFPR7678M1ZS), AHB Enterprises (GSTIN-29EWQPA9619P1ZG), Fortune Enterprises (GSTIN-29JATPK3193N1ZI), A R Traders (GSTIN-29FDEPA7685H1Z5), P VR Traders (GSTIN-29COBPV6331L1ZD). Junaid Enterprises (GSTIN-29CIUPJ8764L1Z1), Blue Enterprises (GSTIN-29FKXPK2789A1ZG), R S Selvam Traders (GSTIN-29CSYPV9104Q1Z7), do not have Input Tax Credit to the extent they have passed on to their recipients. d. The entities mentioned above are into the business of sale and ....
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....s nature of transactions reported by them. Therefore, M/s U. K. Steel Traders appears to be a fake entity floated with sole intention of availing and passing on of inadmissible ITC on the strength of invoices without actual receipt of goods and/or services. (MAHAZAR) ii. M/s. N.M.G. Traders (GSTIN-29EMIPA3360K1ZW) a. The TP is registered with the department since 2022-05-17. Their registration is active as on date and Shri Nasir Ahmed is the proprietor of the taxpayer. b. As per GSTR2A registration The taxpayer has received total ITC of Rs.49,76,23,850/-from 18 suppliers (as per inward supply statement GSTR-2A). Major supplier is M/s. U.K. Steel Traders who alone have passed on ITC of Rs. 42,45,53,127/- to M/s. NMG Traders. Remaining 13 suppliers are cancelled suo-moto by the department. c. The taxpayer has passed on ITC of Rs. 46.52 Crore to various recipients and major recipients are ACTIVE. d. The major recipient is M/s. A R Steel (GSTIN-29AHBPA2384HIZJ) who have received input tax credit of Rs. 20,52,39,822/- from M/s. N.M.G Traders. The other recipient, M/s. M K Traders (GSTIN-29IRZPK8080E1ZT) has received ITC of Rs. 18,57,88,319/- ....
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....number but no response was found and hence, it was sealed in the presence of independent witness. It appeared that no business activity was being carried out on the said premises. (MAHAZAR) e. The proceedings at the residence of the proprietor of M/s M.K. Traders is elaborated at para-6 below. 5. For ease of understanding, the supply chain is illustrated in the following flow chart: 6. During investigation, simultaneous searches were carried out at the registered principal places, additional places and available residential premises of the proprietors of the above-mentioned entities. The outcome of the searches of the principal places of business and additional places has been discussed at Para-4 above while describing the nature of transactions undertaken by M/s. M.K. Traders, M/s. A.R. Steel, M/s. U.K. Steel Trader and M/s. N.M.G. Traders. The search proceedings at the residential premises of the proprietor of the said entities is elaborated as under: i. Search at the residential premises of Shri Mohammed Kamran (Prop: M.K. Traders) and Shri Akrampasha (Prop: AR Steel). a. As per the information available on the GST portal the residenc....
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....nfant. With regard to Shri Parampasa, they informed that he is not in the house. The officer started looking after the recording of CCTV to find out the possible reason for delay in opening the door. From the recording, it was known that Shri Akrampasa was visible on the terrace and managed to jump to the adjacent building and escaped from there on one scooter with the help of one unidentified Aides. While officer started recording statement of the Shri Mohammed Kamran, he started showing aggression and after some time his brother and other family members took their mobile phone one after another and made calls to their accomplices. Soon thereafter, people on the bikes arrived at the premise and pretended to be from Media and started shouting over officers. Within no time many people gathered outside the premises and entered into premise under search. While the officers present were busy in calming down the mob and Shri Kamran took advantage of the mob and escaped from the premises. Meanwhile, the family members took out the segregated documents by the officer which appears to be incriminating for the evidence purpose. Later, while the forensic examiner was sealing the Hard disk of....
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....ting over the officers and disturbed the search proceeding. Also, they took out Shri Nashir Ahmed out of the premises with them. During the initial enquiry with the Prop. Nashir Ahmed, it was known that the business of M/s. N.M.G Traders are dealt by Shri Mohammed Kamran, prop. Of M/s. M. K. Trader. Such submission was recorded in the video taken during the investigation but the recorded statement in writing could not be signed by Shri Nasir Ahmed due obstruction caused by Shri Mohammed Umar (the brother of Kamran) and his associates who forcibly took him with them. The proceedings at the premises during search are recorded in the Mahazar drawn on the spot which is placed as Document No.3 to this petition. 7. As elaborated above, the search proceedings at the premises were disrupted by a group of people which were apparently mobilized by Shri Akram Pasha, who had fled the premises before the search at the said premises could even begin and by his son Shri Mohammed Kamran who did not co-operated in the search proceedings and made calls during the search after which the mob intruded in the premises under search and assisted Shri Mohammed Kamran in fleeing the premises during....
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....quently, a statement of Shri Mohammed Kamran was recorded under Section 70 at Kempegowda International Airport, Bengaluru on 16.09.2025; he again remained evasive and non-cooperative, though the statement was duly recorded. The said statement dated 16.09.2025 of Shri Mohammed Kamran is placed as Document No.6 to this petition. 9. EXAMINATION AND ANALYSIS OF THE EVIDENCE SEIZED DURING INVESTIGATION: i. During the search proceedings at the residence of Shri Mohammed Kamran, located at 7, Bannimantap A Layout, Bannimantap, Mysuru, Karnataka - 570015, one MacBook, a pendrive, and certain documents were seized. Forensic imaging of these electronic devices is required to be carried out in the presence of Shri Mohammed Kamran. Among the seized documents, a handwritten account detailing date-wise payments made to various persons was found. These entries appear to reflect cash transactions routed through intermediaries, as each entry mentions the names of two individuals. In addition, unsigned trading/financial statements of M/s A.R. Steel (Prop. Akram Pasha) and M/s A.K. Steel Traders (Prop. Shri Abdul Asif) were also found at the premises. ii. It is noteworthy t....
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.... Nasir Ahmed (Proprietor, M/s N.M.G. Traders), deliberate obstruction was caused with malafide intent and attempts were made to destroy evidence. Shri Mohammed Kamran and his father, Shri Akram Pasha, managed to escape during the entry of officers for search. Shri Mohammed Umar, brother of Shri Kamran, played a key role in organizing an agitation together with Shri Kamran, which facilitated the escape of Shri Nadeem Ahmed and Shri Nasir Ahmed. The synchronized nature of the escapes clearly indicates close nexus among all the proprietors - Shri Mohammed Kamran, Shri Akram Pasha, Shri Nadeem Ahmed, and Shri Nasir Ahmed - with Shri Kamran emerging as the mastermind, as all agitation and escapes (except that of Akram Pasha) occurred after Kamran and his brother Umar absconded during the search of their premises. ii. The principal and additional places of business of the above entities were found locked, with no signs of active business operations at multiple locations. Further, documents seized during the searches reveal that Shri Akram Pasha is also the proprietor of M/s A.R. Traders, and unsigned financial documents of M/s A.K. Steel Traders (Prop. Abdul Asif), along with ha....
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.... Section 132 (5) of the CGST Act, 2017, the offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause(i) of that sub-section shall be cognizable and non-bailable. 11.3. Further as per Section 69(1) of the CGST Act, 2017, "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 authorize any officer of Central tax to arrest such person". 12. Further, in view of the incidents during the search proceedings dated 10.09.2025 particularly the acts of absconding from premises and attempts to obstruct/destroy evidence is a grave apprehension that if the above-named persons are left at large, they will tamper with crucial evidence, threaten/coerce witnesses, and thereby frustrate the course of investigation. It is also pertiment that several sets of documents and digital records are yet to be recovered, examined, and verified, which are essential to quantify the ....
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....ses with the support of the mob. He also snatched away crucial digital evidence. Shri Mohammed Kamran raises serious apprehensions of tampering with evidence and influencing co-conspirators and crucial witnesses. He is also at risk of fleeing and furthering the scam he has orchestrated. iii. In view of the above, and considering the grave offence committed by Mohammed Kamran, he is at risk of fleeing and evading the investigation. Furthermore, there is a high risk that Mohammed Kamran will tamper with the evidence and influence the witness in the scam. The culpable mental state of Mohanimed Kamran has already been demonstrated by his acts of fleeing the ongoing search proceedings at his residence with crucial digital evidence. It raises serious apprehensions of tampering with evidence and influencing co-conspirators and vital witnesses in the case. iv. The facts brought on record firmly establish beyond doubt that Mohammed Kamran is the mastermind who is responsible for the commission of offences under clause (c) of sub-section (1) of Section 132 of the CGST Act, 2017, which are punishable under clause (i) of the said sub-section with imprisonment up to five years....
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....risonment for a term which may extend to five years and with fine: ...." 16.2 Further super Section 132(5) of the CGST Act, 2017, the offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause(i) of that sub-section shall be cognizable and non-bailable. 16.3 Further as per Section 69(1) of the CGST Act, 2017, "Where the Commissioner has reasons to believe that a person has committed any offence specified in 132(1)(a, b, c &d) of the CGST Act, 2017 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorize any officer of central tax to arrest such person". 16.4. In this case, Shri Mohammed Kamran S/o Shri Akram Pasha, aged about 24 Years (DoB: 26.12.2000), Resident of LIG-61, bannimantap road, Bannimantap, Mysore-570015, has involved himself in the evasion of GST by way of availing of ITC totally amounting to Rs.21.11 Crores without underlying supply of goods or services which is an offence under Section 132(1)(c) of Central Goods and Services Tax Act, 2017,. The same is a cognizable offence and non-bailable as p....
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....ves unearthing the network of transactions, layers of benefits drawn, evaluating quantum of evasion of GST, collecting, collating and scrutinizing thousands of records pertaining to the said entities and questioning several individuals involved in the meticulously planned scam in order to conclude the investigation into meaningful and justified outcome. 17.2 The investigation at hand has evidenced that Shri Mohammed Kamran has availed fraudulent ITC to the tune of 21.11 crores without supply of goods and/or services and availing input tax credit without actual receipt of goods and/or services. His name has figured out from every nook and corner of the investigation. It is evident from the investigation done thus far that Shri Mohammed Kamran has several other conspirators and accomplices - both small and big- in the syndicate. 17.3 As the proprietor of M/s M.K. Traders, Shri Mohammed Kamran has attempted to tamper with evidence in several ways. He initially obstructed the search by refusing to open the door of his residence for about 1.5 to 2 hours, evidently to conceal or destroy evidence. During the proceedings, he also facilitated the escape of Shri Akram Pasha....
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....tted that the department is pursuing further investigation in the matter and the investigations need to be conducted to quantify total GST liability and gather further evidence establishing the evasion of GST. 18. In view of the foregoing, the complainant most prays that: PRAYER The arrested accused, Shri Mohammed Kamran S/o Akram Pasha are hereby produced before the Hon'ble Court. In view of the above circumstances, it is most humbly prayed that the accused Shri Mohammed Kamran, may be remanded to Judicial Custody for fifteen (15) days in the interest of further investigation and thus render justice. Place: Bengaluru Date: 16.09.2025 Sd/-16/09/2025 ASHOK KUMAR YADAV SENIOR INTELLIGENCE OFFICER DGGI BENGALURU ZONAL UNIT" The arrest memo reads as follows: "GSTIN-29IRZPK8080E1ZT CBIC-DIN-202509DSS0000021262E File No-DGGI/INV/125/2025-Gr C-01-0/0 Pr ADG-DGGI-ZU-BENG ARREST MEMO (To be prepared in duplicate) [under Section 69 of the Central Goods and Services Tax Act, 2017] Whereas, the principal Commissioner/Commissioner, Anwar Ali T.P. has reasons to believe that you, Mr Moham....
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....ship of Shri. Mohammed Kamran S/o Shri Akram Pasha, is registered with the department under GSTIN 29IRZPK8080E1ZT for supply goods viz. FERROUS WASTE AND SCRAP; REMELTING SCRAP INGOTS OF IRON OR STEEL, HSN-7204. The taxpayer has registered principal place of business at 75, 2nd Main Road, 4th Cross, Kesare Village, Kasaba Hobli, Mysuru (Mysore) - 570007 and an Additional Place of Business at Ground Floor, Bunder, ANSARI ROAD, Near Yateem Khana, Mangaluru, Dakshina Kannada, Karnataka, 575001. The taxpayer falls under the jurisdiction of Lashker Mohalla Range of Mysore CGST Commissionerate. ii) Further, Shri Mohammed Kamran, has been found to have fraudulently availed ineligible input tax credit (ITC) of Rs.21.11 Crores on the strength of invoices without accompanying supply of goods/services. Out of the above ITC Rs.2.53 Cr has been availed from suppliers, whose registrations have been suo-moto cancelled/suspended by the Department on the grounds of being non-existent or engaged in passing on ineligible credit. Further, he has availed ITC of Rs.18.58 Crores from M/s. N.M.G. Traders which does not have any legitimate business and is a proprietary concern of Nasir Ahmed which....
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.... 29ERLPR8805J1ZW 10,00,245 1,80,044 Cancelled suo moto Elahi Traders 29LUKPS2747H1ZR 8,00,112 1,44,020 Cancelled suo moto Lido Enterprises 29ALUPI4474M1Z5 7,50,000 1,35,000 Cancelled suo moto Sona Electronics 29ADWPM0455G1Z4 1,39,453 39,047 Cancelled suo moto Total 1,17,24,77,389 21,10,92,721 iv. Shri Mohammed Kamran has fraudulently availed ITC of Rs.21.11 Crores without receipt of goods/services, solely on the strength of bogus invoices issued by non-existent/fictitious firms, including M/s. N.M.G. Traders. v. His acts constitute offences under the CGST Act, 2017, under Section 132(1)(c): Availment/utilisation of ITC without actual receipt of goods/services; vi. The fraudulent ITC involved Rs.21.11 Crores, far exceeds the statutory threshold of Rs.5 Crores. Therefore, in terms of Section 132(5) of the CGST Act, 2017, the offences are cognizable and non-bailable. vii. In view of the above, there are sufficient and reasonable grounds that Shri Mohammed Kamran has committed the offences punishable under the CGST Act, 2017. Accordingly, in exercise of powers un....
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....tampering with evidence and influencing co-conspirators and vital witnesses in the case. 4. That Shri Mohammed Kamran has committed the offences as per Clause (c) of Sub-section (1) of Section 132 of the Central Goods and Services Tax Act, 2017, which are punishable with imprisonment for a term which may extend to five years and with a fine, in terms of clause (i) of Sub-Section (1) of Section 132 of the said Act. Further, these alleged offences are cognizable and non-bailable in terms of sub-section (5) of Section 132 of the said Act. 7. In view of the above, there are sufficient and reasonable grounds to believe that Shri Mohammed Kamran has committed the offences punishable under Section 132(1)(i) of the CGST Act, 2017, which are cognizable and non-bailable. Accordingly, I invoke my powers under Section 69(1) of the CGST Act, 2017, to effect his arrest to prevent further destruction of evidence, enable custodial interrogation, and safeguard the revenue. 8. Hence, I have reasons to believe that Shri Mohammed Kamran, has committed offences as per Clause (c) of Sub-section (1) of Section 132 of the Central Goods and Services Tax Act, 2017, which are punis....
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.... the said section that "subject-matter" needs to be understood in perspective of initiation of proceedings. In other words, subject-matter of the proceedings. In the preceding paragraphs of this judgment, we have stated that proceedings stand initiated when a show-cause notice is issued with regard to a subject-matter. We say so because an issuance of a show-cause notice is the first stage whereby the Revenue for the very first time elaborately pens down various grounds and charges it is alleging against the assessee, who is invited to show cause as to why adverse action must not be taken against him on the basis of the apprehensions that the authority contemplates. ... ... ... 85. Primacy is given to the cogency of a show-cause notice. The subject-matter of the proceedings lies in the contents of the notice. Hence, it ought to be exhaustive, so much so that it is capable of presenting the case of the Revenue in a nutshell. In Commissioner of Central Excise, Bhubaneswar-I v. Champdany Industries Limited reported in [(2010) 1 GSTR 52 (SC); (2009) 9 SCC 466; 2009 SCC OnLine SC 1606.], while deciding upon the classification of jute carpets, this court noted that in t....
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....nce or non-compliance together with the relief or demand sought by the Revenue, as articulated in the show-cause notice through its charges, grounds, and quantification of demand. Accordingly, the bar on the "same subject-matter" is attracted only where both proceedings seek to assess or recover an identical liability, or even where there is the slightest overlap in the tax liability or obligation. 88. In other words, under section 6(2)(b), the "subject-matter" is intrinsically tied to the determination of the specific violation under scrutiny or the liability alleged to be unpaid. The statutory bar is triggered only when the two proceedings against the same taxpayer are, in substance, directed towards the very same or overlapping deficiency in tax discharge or the identical contravention alleged. Where the proceedings concern distinct infractions, each Department is entitled to proceed within its respective statutory remit without infringing the prohibition. Where the proceedings concern distinct infractions, each Department is entitled to proceed within its respective statutory remit without infringing the prohibition. 89. In order to bolster such embodiments of....
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.... unified national market for goods and services and to prevent taxpayers from the undue hardship of being subjected to the rigours of multiple jurisdictions. 94. The provision serves a twofold purpose : first, to insulate taxpayers from the prospect of being proceeded against by more than one authority for the same subject-matter; and secondly, to vest in the officers functioning under the CGST Act, the SGST Act, or the UTGST Act, to render a comprehensive order, thereby avoiding multiplicity of proceedings. Such a construction is also in consonance with the well-recognized principle of comity between jurisdictions, which mandates that coordinate authorities must act with mutual respect and due regard for each other's domain, so as to preclude the possibility of conflicting determinations on the same issue. 95. To give effect to the above intent, section 6(2)(a) is couched in terms that are both enabling and mandatory. It confers upon, and simultaneously obliges, the proper officer to issue a corresponding order under the SGST Act or the UTGST Act in cases where an order is being issued under the CGST Act. The expression "order", qualified by the terms "under ....
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.... (vii) The expression "subject-matter" refers to any tax liability, deficiency, or obligation arising from any particular contravention which the Department seeks to assess or recover. (viii) Where any two proceedings initiated by the Department seek to assess or recover an identical or a partial overlap in the tax liability, deficiency or obligation arising from any particular contravention, the bar of section 6(2)(b) would be immediately attracted. (ix) Where the proceedings concern distinct infractions, the same would not constitute a "same subject-matter" even if the tax liability, deficiency, or obligation is same or similar, and the bar under section 6(2)(b) would not be attracted. (x) The twofold test for determining whether a subject-matter is "same" entails, first, determining if an authority has already proceeded on an identical liability of tax or alleged offence by the assessee on the same facts, and secondly, if the demand or relief sought is identical. 98. We issue the following guidelines to be followed in cases where, after the commencement of an inquiry or investigation by one authority, another inquiry or investigation on....
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....ry or investigation into the matter to the authority designated to carry the inquiry or investigation to its logical conclusion. We say, so because, the taxable person except for being afforded the statutory protection from duplication of proceedings, otherwise has no locus to claim which authority should proceed with the inquiry or investigation in a particular matter. (g) However, where the authorities are unable to reach a decision as to which of them shall continue with the inquiry or investigation, then in such circumstances, the authority that first initiated the inquiry or investigation shall be empowered to carry it to its logical conclusion, and the courts in such a case would be competent to pass an order for transferring the inquiry or investigation to that authority. (h) If it is found that the authorities are not complying with these aforementioned guidelines, it shall be open to the taxable person to file a writ petition before the concerned High Court under article 226 of the Constitution of India. (i) At the same time, taxable persons shall ensure complete cooperation with the authorities. It is incumbent upon them to appear in response to....
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....een 'reasons for arrest' and 'grounds of arrest' made by the Hon'ble Supreme Court in the case of PRABIR PURKAYASTHA Vs STATE (NCT OF DELHI), CRIMINAL APPEAL (D. No. 42896/2023). The relevant para of the said Judgement dated 15th May, 2024, reads as follows: "49. It may be reiterated at the cost of repetition that there is a significant difference in the phrase 'reasons for arrest' and 'grounds of arrest'. The 'reasons for arrest' as indicated in the arrest memo are purely formal parameters, viz., to prevent the accused person from committing any further offence; for proper investigation of the offence; to prevent the accused person from causing the evidence of the offence to disappear or tempering with such evidence in any manner; to prevent the arrested person for making inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to the Investigating Officer. These reasons would commonly apply to any person arrested on charge of a crime whereas the 'grounds of arrest' would be required to contain all such details in hand of the Investigating ....
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....of sub-section (1) to Section 132 and punishable under clause (i) of that sub-section are cognizable and non-bailable. Thus, only when the offence falls under the limited categories specified in clauses (a) to (d) of sub-section (1) to Section 132, and, when the amount of tax evaded, amount of input tax credit wrongly availed or utilised, or the amount of refund wrongly taken exceeds Rs 500 lakhs, that the offence is non-bailable and cognizable. At this stage, we must note the submission made on behalf of the Revenue that in cases of bailable and non-cognizable offences, the Central/State officers do not make arrests. Arrests are made only when the offence is non-bailable and cognizable, satisfying the conditions of sub-section (5) to Section 132, as specified in clauses (a) to (d) of sub-section (1) to Section 132 of the CGST Act. 58. It is clear from the aforesaid provisions that, to pass an order of arrest in case of cognizable and non-cognizable offences, the Commissioner must satisfactorily show, vide the reasons to believe recorded by him, that the person to be arrested has committed a non-bailable offence and that the preconditions of sub-section (5) to Section 132 ....
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.... (2016) 96 VST 37 : 2016 SCC OnLine Del 4951], it has been submitted on behalf of the petitioners, that the power under sub-section (5) to Section 132 cannot be exercised unless the procedure under Section 73 of the CGST Act is completed and an assessment order is passed quantifying the tax evaded or erroneously refunded or input tax credit wrongly availed. According to us, this contention should not be accepted as a general or broad proposition. We would accept that normally the assessment proceedings would quantify the amount of tax evaded, etc. and go on to show whether there is any violation in terms of clauses (a) to (d) to sub-section (1) of Section 132 of the CGST Act and that clause (i) to sub-section (1) is attracted. But there could be cases where even without a formal order of assessment, the Department/Revenue is certain that it is a case of offence under clauses (a) to (d) to sub-section (1) of Section 132 and the amount of tax evaded, etc. falls within clause (i) of sub-section (1) to Section 132 of the CGST Act with sufficient degree of certainty. In such cases, the Commissioner may authorise arrest when he is able to ascertain and record reasons to believe. As indic....
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....precedent to arrest: 3.1. Sub-section (1) of Section 132 of the CGST Act, 2017 deals with the punishment for offences specified therein. Sub-section (1) of Section 69 gives the power to the Commissioner to arrest a person where he has reason to believe that the alleged offender 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 clause (ii) of sub-section (1), or sub-section (2) of the Section 132 of the CGST Act, 2017. Therefore, before placing a person under arrest, the legal requirements must be fulfilled. The reasons to believe to arrive at a decision to place an alleged offender under arrest must be unambiguous and amply clear. The reasons to believe must be based on credible material. 3.2. Since arrest impinges on the personal liberty of an individual, the power to arrest must be exercised carefully. The arrest should not be made in routine and mechanical manner. Even if all the legal conditions precedent to arrest mentioned in Section 132 of the CGST Act, 2017 are fulfilled, that will not, ipso facto, mean that an arrest must be made. Once the l....
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....person involved, the evidence available and that he has reason to believe that the person has committed an offence as mentioned in Section 132 of the CGST Act. The provisions of the Code, read with Section 69(3) of the CGST Act, relating to arrest and procedure thereof, must be adhered to. Compliance must also be made with the directions in D.K. Basu [D.K. Basu v. State of W.B., (1997) 1 SCC 416: 1997 SCC (Cri) 92]. 64.1. The format of arrest, as prescribed by the Central Board of Indirect Taxes and Customs in Circular No. 128/47/2019-GST dated 23-12-2019, has also been referred to in this Instruction. Therefore, the arrest memo should indicate the relevant section(s) of the GST Act and other laws. 64.2. In addition, the grounds of arrest must be explained to the arrested person and noted in the arrest memo. This instruction regarding the grounds of arrest came to be amended by the Central Board of Indirect Taxes and Customs (GST-Investigation Wing) vide Instruction No. 01/2025-GST dated 13-1-2025 (GST/INV/Instructions/21-22). The Circular dated 13-1-2025 now mandates that the grounds of arrest must be explained to the arrested person and also be furnished to him ....