Court finds procedural lapses in arrest and remand under CGST Act, orders release of Jai Kumar Aggarwal
In a significant ruling, the Allahabad High Court has ordered the immediate release of Jai Kumar Aggarwal, who was detained under the Central Goods and Services Tax (CGST) Act, citing procedural lapses during his arrest and remand process. The Division Bench comprising Justices Siddharth and Jai Krishna Upadhyay passed the order in response to a habeas corpus petition filed by Aggarwal.
The court observed that the arrest and subsequent remand of Aggarwal did not comply with the constitutional and statutory safeguards mandated by law. According to the court, Aggarwal was not provided with the "grounds of arrest" or "reasons to believe" at the time of his arrest, violating both the CGST Act and constitutional provisions ensuring personal liberty.
The court emphasized that under Section 69 of the CGST Act, the Commissioner must explicitly record "reasons to believe" based on credible material and evidence before authorizing an arrest. The bench referred to precedents set by the Supreme Court, which underline the necessity of informing the arrestee of the grounds of arrest to enable them to challenge the legality of the detention.
The bench further highlighted the failure to adhere to procedural directives outlined in departmental circulars, which state that the "grounds of arrest" must be explained and furnished in writing to the arrested individual. This non-compliance rendered the remand order illegal.
The judgment also referenced the Supreme Court's decision in "Satendra Kumar Antil v. C.B.I.," asserting that arrests for offences punishable by imprisonment of seven years or less should not be routinely executed. The High Court reaffirmed this position, noting that the alleged GST offence against Aggarwal fell within this category.
In its order, the Allahabad High Court quashed the remand order and directed the release of Aggarwal from custody, while allowing the authorities to initiate fresh proceedings if deemed necessary, in strict adherence to legal procedures.
The Directorate General of GST Intelligence and involved authorities have been reminded of the critical importance of following due process in arrests under the CGST Act to uphold constitutional protections of personal liberty.
Bottom Line:
Arrest under CGST Act - Grounds of arrest and reasons to believe must be communicated to the arrestee to comply with constitutional and statutory safeguards - Failure to provide these at the time of arrest renders the subsequent remand order illegal.
Statutory provision(s): Central Goods and Services Tax Act, 2017 Sections 67, 69, 132; Constitution of India, 1950 Article 226
