Section 69: Power of Arrest

What does Section 69 Say?

Where the commissioner has reason to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub section 1 of section 132 which is punishable under clause (i) or (ii) of subsection (1) or subsection (2) of the said section,he may by order authorize any officer of central tax to arrest such person.

(2) Where a person is arrested under sub-section (1) for an offence specified under sub- section (5) of section 132, the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twentyfour hours.

(3) Subject to the provisions of the Code of Criminal Procedure, 1973,–– (a) where a person is arrested under sub-section (1) for any offence specified under sub-section

(4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate;

In the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station.

As per section 69, the power of arrest arise when offence specified u/s 132 has been invoked.

Now let us understand what section 132 talks about

The Section 132 has been reproduced below: Punishment of Certain Offences with Imprisonment or Fine.

1. Whoever commits or cause to commit and retain benefit arising out of  any of the following offences:

• Supplies any goods or services or both without issue of invoice in violation of the provisions of act or rules made there under.
• Issue any Invoice or bill without supply of Goods or Services or both in violation of the provisions of act or rules made there under.
• Avails input tax credit  using the invoice or bill referred in clause b above or fraudulently avail any input tax credit without any invoice or bill.
• Collects any amount as tax and failed to pay the same to the government beyond three months from date of such payment becomes due.
• Falsifies or substitute financial records or produce fake accounts or documents or furnishes any false information with an intent to evade tax.
• Obstruct or prevent any officer in discharge of his duties under this act.
• acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder;
• receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contravention of any provisions of this Act or the rules made thereunder;
• tampers with or destroys any material evidence or documents;
• fails to supply any information which he is required to supply under this Act or the rules made thereunder or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information;
• attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) to (j) of this section.

In above said section we have talked about the power of arrest and circumstances under which arrest provision arises, now let us talk about the punishment which arises due to such sections:

1. Where the amount of tax evaded or amount of Input tax credit wrongly utilized or amount of refund wrongly taken  exceeds five hundred lakhs  rupees with imprisonment of term which may extend to five years and with fine.
2. Where the amount of tax evaded or amount of Input tax credit wrongly utilized or amount of refund wrongly taken exceeds Two hundred lakhs  rupees and not exceeding five hundred lakhs with imprisonment of term which may extend to three years and with fine.
3. Where the amount of tax evaded or amount of Input tax credit wrongly utilized or amount of refund wrongly taken exceeds One hundred lakhs rupees and not exceeding Two hundred lakhs with imprisonment of term which may extend to One years and with fine.
4. Where in case he commits or abets commission of an offence for falsification or substation of records, obstruction of officer or tampering of evidences etc punishable for an imprisonment which may extend to six months or with fine or both.

Judicial Decision

1. Section 69 and 132 of CGST ACT prima facie valid as power to arrest and prosecute is ancillary to power to levy and collect GST (Delhi HC).
2. No Case of alleged offence under section 132 (1)(a) is made out-Gujarat High Court grants bail.

Author View: We have understand the Section 69 and Section 132 of the CGST Act 2017 which talks about arrest provision and offences under which arrest provision is levied. But the foremost condition to be established is that commit or cause to commit an offence and retaining benefit of it is necessary.

The above said article contains author viewpoint only, for more clarifications please refer the respective sections, rules framed under GST.