Summary
The Court set aside directions requiring completion of a GST inquiry within eight weeks and providing further protection from arrest. Summoned assessees were expected to appear and cooperate; blanket conditions could not obstruct lawful statutory arrest powers. The Court nevertheless gave them one more opportunity to attend for recording of statements, leaving further lawful action open on default.
Issues
- Whether the High Court could impose a fixed adjudication deadline and blanket protection against arrest at the summons stage.
- What remedy for pre-arrest protection was available in the GST summons context considered by the Court.
Provisions considered
- Sections 69 and 70, Central Goods and Services Tax Act, 2017Attendance for inquiry was required, while arrest depended on the statutory reasons-to-believe conditions; the Court rejected restrictions frustrating the lawful exercise of that power. (¶¶ 5, 11, 12, 13, 14, 16, 18, 19)
- Section 438, Code of Criminal Procedure, 1973In the GST summons setting considered, the Court held anticipatory bail unavailable at that stage before the statutory arrest power was invoked, identifying exceptional Article 226 protection as the route. (¶¶ 16, 17)
- Article 226, Constitution of IndiaPre-arrest protection remained an exceptional and sparingly exercised writ remedy, requiring assessment of whether relief would obstruct a statutory function. (¶¶ 16, 17)
Held
- The assessees should have honoured the summons and appeared for inquiry. The High Court’s manner of disposing of the petitions, including the adjudication deadline and consequent protection, was unsustainable. (¶¶ 7, 9, 10, 11, 20)
- Statutory arrest power must rest on objective facts and the requisite reasons to believe that specified offences were committed. Courts should ordinarily avoid imposing blanket advance-notice or other conditions that disable the lawful exercise of that power. (¶¶ 12, 13, 14, 15)
- For the summons-stage circumstances before it, the Court held that Section 438 could not be invoked and that protection could be sought under Article 226. Writ protection is exceptional and must be exercised sparingly after examining the facts and statutory functions involved. (¶¶ 16, 17)
- The Court agreed with the quoted discussion that statutory arrest safeguards and the limited protections discussed under Sections 41 and 41A must be kept in mind. Compliance with appearance notices does not confer an absolute, irrevocable immunity from arrest. (¶ 18)
- Both assessees were given one further opportunity to attend for recording their statements. If they failed to appear, the authority could proceed further according to law; the order did not itself determine tax evasion or direct an automatic arrest. (¶¶ 19, 20)
Result
Appeals allowed; common High Court order set aside. Respondents given one more opportunity to appear for statements, failing which authorities may proceed according to law. Pending applications disposed of.