TaxTMI 
TaxTMI 
2026 (10) TMI 439
X X X X Extracts X X X X
X X X X Extracts X X X X
....g network for Pan Masala, Zarda Scented Tobacco and Desi Dohra without payment of applicable GST, HSN Cess and Central Excise duty. 4. Acting on specific intelligence, DGGI, Lucknow Zonal Unit, conducted searches at seven premises on 18.08.2026 and allegedly recovered and seized 27 undeclared FFS pouch-packing machines from three unregistered manufacturing units, besides raw materials, packaging material, invoices and finished products. 5. The revenue evasion has allegedly been quantified at more than Rs. 186.62 crores, apart from further GST liability alleged to be payable. It is further alleged that in his statement recorded under Section 70 of the CGST Act, Manish Kumar allegedly admitted to clandestine manufacture and clearance using the said machines. His involvement was allegedly corroborated by statements of machine operator Ram Lakhan, contractor Arvind Kumar and employee Rakesh Kumar, who attributed the operation, supply of raw materials and management of the units to Manish Kumar and his brother David. 6. Learned counsel for the applicant submits that the materials collected by the Department itself identify co-accused Manish Kumar, proprietor of M/s Kamadgiri Pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an automatic right to anticipatory bail. It is urged that effective investigation may require his confrontation with witnesses, documents, electronic evidence and other material collected during investigation. 11. Placing reliance upon P. Chidambaram vs. Directorate of Enforcement, (2020) 13 SCC 791, learned counsel submits that anticipatory bail ought not to be granted in a manner which may frustrate effective interrogation and investigation, particularly in a complex economic offence. 12. Having heard learned counsel for the parties and perused the material on record. The first question which arises for consideration is whether the present application can be said to be premature merely because the applicant has been summoned under Section 70 of the CGST Act. In this regard, Section 69 of the CGST Act deals with the power of arrest whereas Section 70 confers upon the proper officer the power to summon the person whose attendance is considered necessary, either to give evidence or to produce a document or any other thing in an inquiry. 13. Before proceeding further, it would be apposite to advert to the provisions of Sections 69 and 70 of the CGST Act, which have a direct ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that the person summoned is under arrest or that an order of arrest has already been passed against him. At the same time, the absence of an existing order of arrest cannot be treated as an absolute bar to the exercise of the jurisdiction for anticipatory bail where the applicant is able to demonstrate a real, genuine and reasonable apprehension of arrest founded upon the facts and circumstances of the particular case. 15. The law relating to the anticipatory bail is now well settled. The jurisdiction is attracted when there is an apprehension of arrest and the Court is required to examine whether such apprehension is reasonable and founded upon tangible circumstances, rather than a mere fanciful or speculative fear. 16. The Hon'ble Supreme Court in Radhika Agarwal v. Union of India, reported in (2025) 6 SCC 545 has also clarified that a person summoned under Section 70 of CGST Act does not, merely by reason of such summons, acquire the status of an accused entitled to the protection contemplated under Article 20(3) of the Constitution. At the same time, the investigation has to proceed in accordance with law and the power vested in the investigating authority cannot be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....close the investigating agency's statutory authority to undertake interrogation in accordance with law, wherever such interrogation is found necessary for fair and effective investigation. 24. The distinction between ordinary questions and custodial interrogation is relevant in the context. In C.B.I. vs. Anil Sharma, (1997) 7 SCC 187, the Hon'ble Supreme Court has observed as under:- "Custodial interrogation is qualitatively more elicitation-oriented than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. In a case like this, effective interrogation of a suspected person is of tremendous advantage in disintering much useful information and also materials which would have been concealed. Success in such interrogation would elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail order during the time he is interrogated. Very often interrogation in such a condition would reduce to a mere ritual. The argument that the custodial interrogation is fraught with the danger of the person being subjected to third-degree methods need not be countenanced, for such an argument can be adva....