Person Summoned Under Sec 69 CGST Act Cannot Seek Anticipatory Bail Under S 438 CrPC; Only Remedy Is Under Art 226 : Supreme Court

The Supreme Court on Monday held that if a person is summoned under Section 69 (Power to arrest) of the CGST Act, 2017 for the purpose of recording of his/her statement, the provision of Section 438 (Anticipatory Bail) of Criminal Procedure Code, 1973 cannot be invoked.

A division bench of Justice J B Pardiwala and Justice Prashant Kumar Mishra observed:

“Thus, the position of law is that if any person is summoned under Section 69 of the CGST Act, 2017 for the purpose of recording of his statement, the provisions of Section 438 of Criminal Procedure Code, 1908 cannot be invoked. We say so as no First Information Report gets registered before the power of arrest under Section 69(1) of the CGST Act, 2017 is invoked and in such circumstances, the person summoned cannot invoke Section 438 of the Code of Criminal Procedure for anticipatory bail.“

The Court also observed that in such a circumstance, the only way to seek protection against arrest would be to approach the High Court under Art. 226 of the Constitution.

In the matter at hand, respondents were issued summons under Section 145 of the Central Excise Act, 1944 for interrogation in connection with alleged evasion of Goods and Service Tax Liability/Contravention of the Provision of the Finance Act 1994 and CGST Act, 2017.

The respondents apprehending arrest on receiving the summons approached the Gujarat High Court by invoking its writ jurisdiction. The High Court directed the respondents to represent their case before the authorities and the authorities were directed to complete the adjudicatory process within eight weeks. The State of Gujarat appealed against this order of the High Court.

The Counsel for the State of Gujarat, Adv. Kanu Agrawal, pointed out that 14 summons have already been issued to one of the respondents. One of the respondents appeared before the authorities for interrogation once and since then no respondents have appeared. The inquiry has been pending for 5 years the Court was informed.

The Apex Court held that the manner in which the High Court disposed of the matter was inappropriate and that the respondents were expected to honour the summons and appear before the authority for interrogation.

Accordingly, the Apex Court set aside the order of the High Court. But it held that one more opportunity would be given to the respondents to appear before the authorities for recording their statements. the authority concerned to proceed further in accordance with law, if the respondents fail to appear, the Court directed.

The Court also observed that in the circumstances of the case, the only way to for the respondents to seek protection against arrest was to approach the High Court under Art. 226 of the Constitution, the Court observed:

“The only way a person summoned can seek protection against the pre-trial arrest is to invoke the jurisdiction of the High Court under Article 226 of the Constitution of India. Undoubtedly, this is exactly what the respondents did in the present case. What the respondents sought by filing two criminal applications under Article 226 of the Constitution before the High Court was the direction to the appellant herein not to arrest them in exercise of the power conferred by Section 69(1) of the GST Act, 2017. This, in essence, is key to prayer for anticipatory bail. However, as we have explained aforesaid, at the stage of summons, the person summoned cannot invoke Section 438 of the Code of Criminal Procedure.”

Case Title: State of Gujarat V. Choodamani Parmeshwaran Iyer

Citation : 2023 LiveLaw (SC) 552

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