GST evasion: Supreme Court to clarify on revenue authorities’ power to arrest : 31-05-2019

The Supreme Court on Wednesday agreed to clarify on various procedural uncertainties regarding GST including the power of the revenue authorities to arrest anyone for GST evasion under the Central Goods and Services Tax Act without registration of an FIR.

The clarification has become necessary as different high courts in the country have held contrary to each other on the issue.

A vacation bench led by Chief Justice Ranjan Gogoi sought response within four weeks from some taxpayers accused of GST evasion on the Centre’s appeals seeking SC interference in clarifying the arrest procedure under the tax regime.

The Supreme Court also restrained the high courts from hearing cases on the issue till it clarified the position. While the Telangana and Jharkhand HCs have favoured the tax authorities, the Bombay HC had taken a contrary view and asked the revenue authorities to refrain from taking any “coercive action” against the alleged evaders.

“As different High Courts of the country have taken divergent views in the matter, we are of the view that the position in law should be clarified by this court,” Justice Gogoi said, adding that “as the accused have been granted the privilege of pre-arrest bail by the (Bombay) High Court, at this stage, we are not inclined to interfere with the same.”
“However, we make it clear that the HCs while entertaining such request (privilege of pre-arrest bail) in future, will keep in mind that this Court (SC) by an order on May 27” had upheld the Telangana HC judgment which had allowed the government authorities to arrest a person in cases of GST evasion.

The bench also listed the batch of petitions before a three-judge bench to decide the question of law on the power of arrest The government has challenged the Bombay HC’s order that asked CGST authorities not to arrest the alleged evaders without following the due procedure prescribed under the Criminal Procedure Code and also without registration of an FIR under Section 154. The government said that such exparte order was passed “despite there being specific provisions segregating the procedure under the Central Goods and services Tax Act, 2017.”

Solicitor-general Tushar Mehta and counsel Kanu Agarwal argued that in several matters concerning the violation of the code, the HCs are granting ex-parte orders. He said high courts are granting bails without considering the principles of CGST and are passing orders contrary to each other.

Source : PTI