Supreme Court: No Anticipatory Bail Under S 438 CrPC for Person Summoned Under Sec 69 CGST Ac

Supreme Court: No Anticipatory Bail Under S 438 CrPC for Person Summoned Under Sec 69 CGST Ac

The Supreme Court has ruled that if an individual is summoned under Section 69 (Power to Arrest) of the CGST Act, 2017, for the purpose of recording their statement, they cannot invoke the provision of Section 438 (Anticipatory Bail) of the Criminal Procedure Code, 1973.

In a recent observation, a Division Bench of Justices J.B. Pardiwala and Prashant Kumar Mishra clarified the legal stance concerning the summoning of a person under Section 69 of the CGST Act, 2017 for recording their statement. The Bench asserted that in such cases, the provisions of Section 438 of the Code of Criminal Procedure, 1908 cannot be invoked. This is because, prior to the invocation of the power of arrest under Section 69(1) of the CGST Act, 2017, no First Information Report (FIR) is registered. Consequently, the person summoned under Section 69 cannot seek anticipatory bail under Section 438 of the Code of Criminal Procedure.

The Court observed that when faced with such a situation, the sole avenue to seek protection against arrest is by approaching the High Court under Article 226 of the Constitution.

In the present case, the respondents were issued summons under Section 145 of the Central Excise Act, 1944 for interrogation in connection with alleged evasion of Goods and Service Tax Liability and contravention of the provisions of the Finance Act, 1994, and the CGST Act, 2017.

Upon receiving the summons and fearing arrest, the respondents sought recourse by invoking the writ jurisdiction of the Gujarat High Court. In response, the High Court directed the respondents to present their case before the authorities, and the authorities were instructed to conclude the adjudicatory process within eight weeks. However, dissatisfied with this order, the State of Gujarat appealed against the High Court's decision.

During the appeal, the Counsel representing the State of Gujarat, Adv. Kanu Agrawal, brought to the Court's attention that 14 summons had already been issued to one of the respondents. Out of these, one respondent appeared before the authorities for interrogation once, but since then, none of the respondents appeared. As a result, the inquiry had been pending for five years.

The Supreme Court held that the manner in which the High Court disposed of the matter was inappropriate. The Court emphasised that the respondents were expected to comply with the summons and present themselves before the authority for interrogation.

As a result, the Supreme Court overturned the order of the High Court. However, the Court decided to grant one more opportunity to the respondents to appear before the authorities and have their statements recorded. The Supreme Court directed that if the respondents fail to appear, the concerned authority should proceed further in accordance with the law.

The Court reiterated that in the circumstances of the case, the only recourse for the respondents to seek protection against pre-trial arrest was by approaching the High Court under Article 226 of the Constitution. The Court observed that by filing two criminal applications under Article 226 before the High Court, the respondents were seeking a direction to the appellant (State of Gujarat) not to arrest them under the powers conferred by Section 69(1) of the GST Act, 2017. This essentially aligned with the essence of an anticipatory bail plea.

However, the Court clarified that at the stage of summons, the person summoned cannot invoke Section 438 of the Code of Criminal Procedure for anticipatory bail.