The Bombay High Court to hear pleas challenging Arrest provisions under the CGST Act.
A writ petition was filed by Abhishek Rastogi, partner at Khaitan & Co challenging the arrest provisions under the goods and services tax (GST) laws.
The petition said Section 69 of the Central GST 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.
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.
The sources said that 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. They have booked 1,488 cases against 4,839 entities.
The petition stated that Section 132 (1) of the Central GST Act provides that specified offenses 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.
Rastogi 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 Act has been challenged in the court.
