TaxTMI 
TaxTMI 
2026 (7) TMI 1762
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....titioners be released forthwith; (ii) to issue a writ, order, or direction in the nature of certiorari setting aside all remand orders passed by the concerned Magistrate / Court against the petitioners under Section 26 of the Health Security Se National Security Act, 2025 at the instance of the Anti Evasion Department of GST Commissionerate, and all consequential proceedings thereof; (iii) to issue any other and further writ, order, or direction, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case; (iv) to allow the instant petition with costs." 3. Learned counsel for the petitioner submits that firm of corpus has obtained registration with G.S.T. Department. He has been illegally arrested and detained. Grounds of arrest was supplied to the corpus are incomplete and therefore, his arrest and detention are illegal. The arrest memo does not contains any viable and legal grounds of arrest as mandated by law. No family member or nominee of corpus was informed about his arrest. 4. The Hon'ble Supreme Court in the case of Mihir Rajesh Shah vs. State of Maharashtra and Another, MANU/SC 1492 / 2025 has held th....
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.... National Security Cess Act, 2025 (hereinafter referred to as the 'Act') is a new Act which has been published in the Gazette of India only on 26.12.2205. The object of the act is to augment the resources for meeting expenditure on national security and for public health and to levy a cess for the said purposes on the machines installed or other processes undertaken by which specified goods are manufactured or produced and for matters connected therewith or incidental thereto. 11. Hence, it is clear that apart from the taxes being leveled against the businessmen / business concerns, this is an additional cess imposed for meeting the expenditure on National Security and Public Health. In the Act there is nothing about informing the factory owners / manufacturers of the country about application of the Act to their factory / business concerns from any particular date. 12. While Chapter I names the Act under Section 1; Section 2 is the definition clause of the Act. 13. Chapter II defines the taxable person for the purpose of the Act as any person who owns, possesses, operates, manages or is otherwise in control of machines or undertakes any process by which specified ....
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....nbelow :- "OFFENCES AND PENALTIES 18. (1) Where a taxable person who- (a) owns, operates or in control of any machine or process for the purpose of manufacture or production of the specified goods without declaring to the proper officer under this Act; or (b) fails to pay the cess levied under section 4 beyond a period of three months from the date on which such payment becomes due under section 10; or (c) fails to furnish returns as required under section 10 or falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information or declaration or return with an intention to evade payment of cess due under the said section; or (d) fraudulently obtains refund of cess; or (e) obstructs or prevents any officer in discharge of his duties under this Act; or (f) is liable to be registered under this Act but fails to obtain registration; or (g) fails to furnish information or documents called for by an officer in accordance with the provisions of this Act or the rules made thereunder, or furnishes false information or documents during any proceedings under this Act; or (....
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....(1) or sub-section (3), for a term less than six months. (5) Notwithstanding anything contained in the Bharatiya Nagarik Suraksha Sanhita, 2023, all offences under this Act, except the offences referred to in sub-section (6) shall be non-cognizable and bailable. (6) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 18 shall be cognizable and non-bailable. (7) No person shall be prosecuted for any offence under this section except with the previous sanction of the proper officer, not below the rank of Commissioner. 20. (1) Where an offence committed by a person under this Act is a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance o....
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....Act, not being an offence punishable with imprisonment only, or with imprisonment and also with fine, may, either before or after the institution of prosecution, be compounded by a proper officer, not below the rank of Commissioner, on payment, by the person accused of the offence, to the Central Government of such compounding amount in such manner as may be prescribed. (2) The option of compounding shall not be available to a person- (a) who has been allowed to compound once in respect of any of the offences specified in clauses (a) to (f) of sub-section (1) of section 18 and the offences which are relatable to the said specified offences; (b) who has been allowed to compound once in respect of any offence, other than those in clause (a), under this Act, the cess exceeding one crore rupees; (c) a person who has been accused of committing an offence under this Act which is also an offence under any other law for the time being in force; (d) a person who has been convicted for an offence under this Act by a Court; and (e) any other class of persons or offences, as may be prescribed. (3) Any compounding shall be allowed o....
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.... or otherwise deal with such goods except with the previous permission of such officer. (4) The documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act. (5) The documents, books or things referred to in sub-section (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice. (6) The officer authorised under sub-section (2) shall have the power to seal or break open the door of any factory or to break open any almirah, electronic device, box, receptacle in which the specified goods, accounts, registers or documents of the person are suspected to be concealed, where access to such factory, almirah, electronic devices, box or receptacle is denied. (7) The person from whose custody any documents are seized under sub-section (2) shall be entitled to make copies thereof or take extracts ther....
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.... the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made thereunder for prosecution. 25. (1) Where any taxable person- (a) owns, operates or controls any machine installed or undertakes any process for the manufacture or production of the specified goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of cess; or (b) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of cess; or then, all such goods or machines shall be liable to confiscation and the person shall be liable to penalty under section 18. (2) Whenever confiscation of any such goods or machines are authorised by this Act, the officer adjudging it shall give to the owner of such goods or machines an option to pay in lieu of confiscation, such penalty as specified under sub-section (3) as the said officer thinks fit. (3) The penalty leviable under sub-section (2) shall not exceed the market value of the specified goods or the machines confiscated, less the cess chargeable thereon. ....
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.... be subject to the same provisions as an officer-in-charge of a police station. 27. (1) Any amount due under this Act (including any interest or penalty) from any taxable person may be recovered in the same manner as an arrear of land revenue. (2) All officers of police, central tax and customs and all officers of the Central Government and the State Government engaged in the collection of land revenue, and all village officers are hereby empowered and required to assist the proper officer in the execution of this Act." 19. Chapter VIII of the Act provides for revision and appeals before the Revisional and Appellate Authorities. 20. Therefore, it is clear that the Act imposes a monthly liability for payment of cess upon the taxable person as defined under Chapter II, Section 3 of the Act. The Act also mandates payment of cess on a monthly basis, latest by the 7th day of every month. Therefore, the computation of manufacturing cess on a monthly basis is an onerous task for a taxable person, and any delay attracts penalty. The Act further provides for criminal liability of the taxable person under Chapter VI and civil liability under Chapter V. Under Section 2....
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....ng machines and evasion of tax. The arrest has been effected for the purposes of custodial interrogation and to prevent tampering with the evidence and influencing the witnesses. However, copy of the arrest memo appears to have been furnished only to the corpus and not to any of his family members or to any person nominated by him. The arrest memo also does not indicates that a copy thereof was supplied to any relative or nominee of the corpus, nor does it discloses the name of the person who was informed about his arrest. Further, all the witnesses mentioned in the arrest memo appear to be strangers to the corpus. The corpus was admittedly arrested during the night of 22.05.2026, and his statement indicates that it was recorded on the intervening night of 22/23.05.2026. However, the letter authorising the arrest of corpus under Section 21(1) was issued by the Commissioner, CGST & Central Excise, Commissionerate, Ghaziabad, only on 23.05.2026. Though the authorisation for search had been issued on 22.05.2026, the authorisation for arrest was issued only on 23.05.2026. Therefore, it is evident that the authorisation for arrest was issued subsequent to the arrest of the petitioner on....