Pursuant to the Hon’ble Apex Court’s decision in the ...

22 August 2022 CBIC issued guidelines for ‘Arrest and Bail’ in relation to offenses punishable under the CGST Act, 2017 Pursuant to the Hon’ble Apex Court’s decision in the case of Siddharth vs The State of Uttar Pradesh dated 16 August 2022, the Central Board of Indirect Taxes and Customs (CBIC) has issued instruction no. 02/2022-23 dated 17 August 2022, the details are mentioned below:   Conditions precedent to arrest   Given that arrest impinges on the personal liberty of an individual, the power to arrest must be exercised carefully. Apart from fulfilling legal conditions precedent to arrest as per Section 132 of the CGST Act, 2017, power to arrest must be exercised only if custodial investigation becomes necessary or it is a heinous crime or where there is a possibility of influencing the witness or where there are reasons to believe that the accused may abscond. Approval for arrest should be granted only where wilful/fraudulent intent is evident and an element of mens rea (guilty mind) is present. Arrest should not be warranted in cases involving interpretational issues.   Procedure for arrest   The provisions of the Code of Criminal Procedure 1973 read with Section 69(3) of the CGST Act must be adhered to. The Principal Commissioner/Commissioner must record on file that he has reasons to believe that the person has committed an offense and may authorize an officer of Central Tax to arrest the concerned person(s). An arrest memo must be prepared, complete in all aspects, to be provided and explained to the concerned person. A separate arrest memo shall be given to each individual (in case there are several arrests in a single matter). It is mandatory to quote the Document Identification Number (DIN) on the arrest memo. Specific modalities with respect to the arrest of females have been outlined in the instruction.   Post arrest formalities Bailable offenses Bail conditions should be informed in writing to the arrested person and on the telephone to the nominated or authorized person of the person arrested. If conditions for grant of bail are not fulfilled, the arrested person shall be produced before the appropriate Magistrate within 24 hours of arrest. Non-Bailable offenses The arrested person shall be produced before the appropriate Magistrate within 24 hours of arrest, exclusive of the time necessary for the journey from the place of arrest to the Magistrate’s Court. A prosecution complaint shall be filed before the competent court, preferably within 60 days of arrest.   Reports to be sent   Monthly reports of arrests made shall be prepared and compiled at the zonal level and sent to the Directorate General of GST Intelligence and Commissioner (GST-Investigation). Our Comments The power to arrest, even though lawful, had an impact of causing incalculable harm to the reputation and self-esteem of a person. The Apex Court had to step in to moderate these powers, and specific emphasis was drawn on providing a justification for exercising the power to arrest instead of making an arrest a routine act or a compulsion. Owing to the Apex Court’s decision, the Circular provides guidelines and instructions for exercising the power of arrest under the CGST Act, 2017. This will entail and, as a result, will provide some relief to avoid unnecessary hassles faced by taxpayers on account of coercive arrest powers exercised by revenue authorities. Nexdigm  ThinkNext@nexdigm.com | www.nexdigm.com USA | Canada | Poland | UAE | India | Hong Kong | Japan DISCLAIMER This alert contains general information which is provided on an "as is" basis without warranties of any kind, express or implied and is not intended to address any particular situation. The information contained herein may not be comprehensive and should not be construed as specific advice or opinion. This alert should not be substituted for any professional advice or service, and it should not be acted or relied upon or used as a basis for any decision or action that may affect you or your business. It is also expressly clarified that this alert is not intended to be a form of solicitation or invitation or advertisement to create any adviser-client relationship. Whilst every effort has been made to ensure the accuracy of the information contained in this alert, the same cannot be guaranteed. We accept no liability or responsibility to any person for any loss or damage incurred by relying on the information contained in this alert. © 2022 Nexdigm. All rights reserved.