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Informist, Wednesday, Aug. 12, 2026

NEW DELHI – The Supreme Court Wednesday held that tax officers must communicate orders of arrest passed under Section 69 of the Central Goods and Services Tax Act, 2017, to the accused for the latter to avail remedies such as seeking anticipatory bail. "If Section 69 were read as it is, without there being any requirement of disclosure of the 'reasons to believe', withholding of reasons could have drastic consequences on the right to liberty of the accused," said a bench of Justice Dipankar Datta and Justice Sheel Nagu.

The order under Section 69 of the Central Goods and Services Tax Act being a "sine qua non" to seek anticipatory bail, it would be an anomaly to hold that the order need not be communicated at all, much less be communicated after the arrest of the person, the court said. In any case, communication of the order would not, in any manner, obstruct the investigation ensued by the department, the court said. On the contrary, it reinforces the right of the accused to seek anticipatory bail, the top court said.

Section 69 of the Central Goods and Services Tax Act grants the Commissioner the power to authorise a central tax officer to arrest any person if there is "reason to believe" they have committed major tax fraud or specified offences under Section 132 of the Act.

The apex court said Rule 8 of the Central Goods and Service Tax Rules, 2017 mandates that a person seeking registration under the CGST Act must provide an email address and mobile number. Thus, the arrest order may be communicated through electronic means in addition to the mode permitted under the Bharatiya Nagarik Suraksha Sanhita, 2023, the court said. This would enable an accused to seek the remedy that the law provides to him, it said.

The top court set aside a Bombay High Court's order that had granted Future Group non-executive director Sunil Biyani protection from arrest for a week from the date of intimation of the order under Section 69 of the Central Goods and Services Tax Act, 2017. Though the high court had rejected Biyani's prayer for pre-arrest bail, it had given him protection from arrest for a week. "We hold that while dismissing a petition seeking pre-arrest bail on the ground that the same is not maintainable – whatever be the ground therefor – the high court or the sessions court, as the case may be, cannot extend or grant protection which is in the nature of interim relief that could be granted during the pendency of the application," the court said. 

The apex court questioned whether the high court could have granted the relief of protection from arrest for a period of one week of communication of the order passed under Section 69 of the CGST Act while dismissing the pre-arrest bail application. It is a settled position of law that even in cases where a petition seeking quashing of a first information report or charge-sheet is dismissed, no interim relief can be granted by the high courts, the top court said.

The case has its genesis in the Directorate General of GST Intelligence, Mumbai, investigating Alphaneon Techsolutions Pvt. Ltd. and its group entities allegedly for wrongfully availing and passing input tax credit without actual supply of goods or services. 

During the investigation, the tax department issued three summonses under Section 70 of the Central Goods and Services Tax Act to Biyani. However, instead of appearing, Biyani sought adjournments and thereafter filed an application for anticipatory bail before a sessions court in Mumbai, which was rejected last year. Thereafter, Biyani approached the high court seeking pre-arrest bail.  End

Reported by Surya Tripathi

Edited by Saji George Titus

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