The Bombay High Court will soon hear the pleas challenging Arrest provisions under the CGST Act. It may be noted that a writ petition has been filed by Abhishek Rastogi, partner at Khaitan & Co challenging the arrest provisions under the goods and services tax (GST) laws.
The petition states that Section 69 of the CGST Act is arbitrary since it gives powers to GST commissioners to arrest a person if he has “reasons to believe” that the person has claimed fraudulent ITC.
Under GST law, Commissioners can order up to five years of arrest of a person who he has reasons to believe is engaged in fraudulent claims. “Reasons to believe are subjective in nature and are prone to misuse.
As reported the GST authorities have arrested 140 “unscrupulous” persons including five chartered accountants in their nationwide drive launched against fake invoices frauds since the second week of November. The GST authorities have booked 1,488 cases against 4,839 entities.
In the petition it has been stated that Section 132 (1) of the CGST Act provides that specified offences involving tax evasion in excess of Rs.5 crore will be cognizable and non-bailable and that officials can proceed with arrest as per the procedure laid out under Section 69 of the CGST Act.
The petitioner said arrests that are being matade involve interpretation of the law and not tax evasion. As such, these require in-depth analysis so that the personal liberty of persons involved is not compromised which is enshrined in Article 21 of the Constitution.
Therefore, the constitutional validity of section 69 read with section 132 (1) of the CGST Act has been challenged in the court.
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