GST Summons Alone Do Not Justify Anticipatory Bail — Punjab & Haryana High Court Reinforces Foundational Requirement of Section 69 Order
Background and Context
The Punjab and Haryana High Court recently adjudicated two connected petitions filed by individuals seeking anticipatory bail in connection with an ongoing investigation under the Central Goods and Services Tax Act, 2017. Since both petitions originated from the same investigation and raised virtually identical legal questions alongside substantially similar factual matrices, the Court disposed of them through a common order. The facts were drawn from CRM-M-15056-2026 for the sake of convenience.
The petitions were filed invoking Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 — the provision corresponding to Section 438 of the Code of Criminal Procedure, 1973 — seeking pre-arrest protection in anticipation of possible arrest arising from the departmental investigation.
Facts of the Case: Prayank Gupta Vs Union of India and Another
Nature of the Investigation
The inquiry at the center of this dispute related to M/s KK Alloys Unit-I and Unit-II. The GST authorities had issued summons dated 25.11.2025 and 27.11.2025 under Section 70 of the Central Goods and Services Tax Act, 2017, directing the petitioners to appear before the investigating authority. The petitioners harboured an apprehension that compliance with these summons could expose them to arrest under Section 69 of the CGST Act.
Petitioners' Contentions
The petitioners advanced the following arguments before the Court:
- They were innocent and had been subjected to repeated summons and search proceedings without justification.
- The underlying dispute was essentially centred on availment of Input Tax Credit and did not warrant extreme measures.
- Crucially, no order under
Section 69of the CGST Act authorising their arrest had been issued by the Commissioner. - Despite the absence of such an order, they entertained a genuine and bona fide apprehension that appearing before the investigating authority might culminate in their arrest.
- On this basis, they sought judicial protection of their personal liberty at the pre-arrest stage.
Department's Opposition
The respondent-Department contested the petitions vigorously, making the following submissions:
- The investigation involved large-scale and organised availment of ineligible Input Tax Credit, pointing to a structured and systematic operation.
- Searches had already been conducted under
Section 67of the CGST Act. - The petitioners had failed to cooperate with the investigation and had not appeared in response to the summons issued under
Section 70. - The investigation was still actively ongoing and required examination of supplier networks, banking transactions, digital evidence, and movement of goods.
Legal Framework: Interplay of Section 69 and Section 70 of the CGST Act
Understanding the Court's ruling requires clarity on the statutory scheme governing arrest and summons under the CGST Act.
Section 70 — Power to Summon
Section 70 of the Central Goods and Services Tax Act, 2017 confers upon the proper officer the power to summon any person whose attendance is considered necessary — either to give evidence or to produce documents in connection with an inquiry. A person summoned under this provision is not automatically treated as an accused; the summons is essentially an investigative tool.
Section 69 — Power to Arrest
Section 69 of the CGST Act vests the Commissioner with the power to authorise the arrest of a person where there exist reasons to believe that the person has committed a cognisable and non-bailable offence under Section 132 of the Act. This authorisation must:
- Be preceded by recorded "reasons to believe"
- Reference the underlying material and evidence forming the basis of such belief
- Demonstrate application of mind by the Commissioner
The Court made it unambiguously clear that it is this order — and only this order — that constitutes the sine qua non for maintaining an anticipatory bail application in GST-related investigations.