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Power of arrest under GST

CA Shubham Gupta 
on 31 January 2021


As per Section 69 - Power to arrest

The Commissioner is vested with the power to authorize, by an order, any Officer of the central tax to arrest a person, where he has reasons to believe that such person has committed the offences

Offences of the kind specified in Section 132(1) follows

(a) Supplies any goods or services or both without issue of any invoice, with the intention to evade tax;

(b) Issues any invoice or bill without supply of goods or services or both leading to wrongful availment or utilization of input tax credit or refund of tax;

Power of arrest under GST

(c) Avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently avails input tax credit without any invoice or bill

(d) Collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;

(ii) or section 132(2) as follows:

In cases where the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken:

Exceeds: Rs. 500 Lacs: Punishable with imprisonment for a term which may extend to 5 years and with fine under section 132; then such an offence shall be cognizable and non-bailable under section 132(5).

or Exceeds Rs 250 Lacs but does not exceed Rs 500 Lacs: Punishable with imprisonment for a term which may extend to 3 years and with fine under section 132.

The period of imprisonment and quantum of fine varies depending on the amount of tax evaded or seriousness of the offence as listed below.

Amount of Tax evaded/ erroneous refund/ wrong

ITC availed or utilized



Exceeding Rs. 5 Crores


Up to 5 years

Rs. 2 Crores - Rs. 5 Crores


Up to 3 years

Rs. 1 Crores - Rs. 2 Crores


Up to 1 years

The officer arresting such person is required to inform him of the grounds of arrest and produce him before the Magistrate within 24 hours.
All other offences under GST law shall be non-cognizable and bailable under section 132(4).

In case of such offences, subject to the provisions of the Code of Criminal Procedure, 1973, the arrested person shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate.

The Assistant/Deputy Commissioner can grant the bail and is conferred powers of an officer-in charge of a police station.


What is the difference between a cognizable and a non-cognizable offense?

Cognizable offenses are those where the police can arrest a person without any arrest warrant. They are serious crimes like murder robbery, counterfeiting.

Non-cognizable offenses are those, where a police officer cannot arrest a person without a warrant issued by competent authority. They are less serious crimes like public nuisance, assault.

The GST law provides the circumstances and instances under which a person can be arrested but no guidelines have been provided in relation to the procedural aspect for arresting a person. Leading to many issues being represented for clarity before Honorable Court of Law.

Many Important Cases have settled related to Arrest Under GST

1) Dhruv Krishan Maggu Vs Union Of India


Mr. Jagmohan Bansal and Mr. J.K. Mittal learned counsel for the Petitioners submitted that Sections 69 and 132 of the Central Goods and Services Tax Act, 2017 (for short ‘CGST Act’) are unconstitutional as being provisions of criminal nature, they could not have been enacted under Article 246A of the Constitution of India, 1950. They emphasized that the power to arrest and prosecute are not ancillary and/or incidental to the power to levy and collect goods and services tax.


They also submitted that the procedure prescribed under the CGST Act is not just, fair and reasonable. They stated that there had been many cases where an assessee had been arrested at initial stage of investigation but the department had subsequently failed to establish its case in adjudication proceedings and in the process, the assessee had suffered irreparable loss on account of arrest.

Verdict- Sections 69 and 132 are constitutional and fall within the legislative competence of Parliament.

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