Arrest Under GST Law: Sections 69 and 132 CGST Act and Anticipatory Bail

The power to arrest

Section 69 of the Central Goods and Services Tax Act, 2017, and the matching provision of the Bihar GST Act, allow the Commissioner to authorise arrest where there are reasons to believe that a person has committed certain offences under Section 132, such as supplying goods or services without an invoice, issuing invoices without any supply, availing input tax credit fraudulently, or collecting tax and not paying it to the government for more than three months.

Cognizable or not: the five-crore line

Under Section 132(5), those offences are cognizable and non-bailable where the tax evaded, credit wrongly availed or refund wrongly taken exceeds five crore rupees; the punishment then extends to five years with fine. Other offences under the Act are non-cognizable and bailable under Section 132(4). Prosecution requires the sanction of the Commissioner.

Radhika Agarwal v. Union of India (2025)

On 27 February 2025, a three-judge bench of the Supreme Court held that the provisions on anticipatory bail in the Code of Criminal Procedure, now the BNSS, apply to the GST and Customs Acts, and that a person apprehending arrest may apply even before an FIR or complaint is filed. The Court also held that the reasons to believe must rest on material and be recorded, that the arrested person must be told the grounds of arrest, and that officers must not use the threat of arrest to compel payment of tax.

Summons under Section 70

Before any arrest, officers usually issue a summons under Section 70 to give evidence or produce documents. An inquiry under Section 70 is treated as a judicial proceeding for limited purposes, so statements must be accurate and should be read carefully before signing.

Bail after arrest

An arrested person is produced before the Magistrate. In bailable offences, bail must be granted. In offences above five crore rupees, bail is at the court's discretion; courts have often noted that GST cases are proved largely by documents already in the department's possession, which bears on the need for continued custody.

If a search or summons takes place

• Ask for, and keep, a copy of the authorisation and the panchnama
• Do not sign a statement you have not read; ask for a copy
• Any deposit of tax should be voluntary; record your objection if it is made under protest
• Take legal advice on anticipatory bail if arrest is apprehended