Instruction No. 02/2022-23 (GST-Investigation) dated 17 August 2022 

Key Pointers -

The Board has examined the judgment of Hon’ble Supreme Court of India dated 16 August 2021and has felt the need to issue guidelines with respect to arrest under CGST Act, 2017. Even, under legacy laws i.e. Central Excise Act, 1944 (1 of 1944) and Chapter V of the Finance Act, 1994 (32 of 1994), the instructions regarding exercise of power to arrest had been issued:

Conditions precedent to arrest:

• Sub-section (1) of Section 132 of CGST Act, 2017 deals with the punishment for offences specified therein. Sub-section (1) of Section 69 gives the power to the Commissioner to arrest a person before placing a person under arrest, the legal requirements must be fulfilled. The reasons to believe to arrive at a decision to place an alleged offender under arrest must be unambiguous and amply clear. 

Procedure for arrest:

• Pr. Commissioner/Commissioner shall record on file that after considering the nature of offence, the role of person involved and evidence available, he has reason to believe that the person has committed an offence as mentioned in Section 132 and may authorize an officer of central tax to arrest the concerned person(s). The provisions of the CR.p.c 1973 read with section 69(3) of CGST Act relating to arrest and the procedure thereof, must be adhered to. Pr. Commissioner/Commissioner should ensure that all officers are fully familiar with the provisions of the Code of Cr.p.c, 1973.
• The arrest memo must be in compliance with the directions of Hon'ble Supreme Court in the case of D.K Basu vs State of West Bengal. Format of arrest memo has been prescribed under Board’s Circular No. 128/47/2019-GST dated December 23, 2019. The arrest memo should indicate relevant sections of the CGST Act, 2017 or other laws attracted to the case and to the arrested person and inapplicable provisions should be struck off. and the grounds of arrest must be explained to the arrested person and this fact must be noted in the arrest memo.

Post arrest formalities

• In cases, where a person is arrested under sub-section (1) of Section 69 of the CGST Act, 2017, for an offence specified under sub-section (4) of Section 132 of the CGST Act, 2017, the Assistant Commissioner or Deputy Commissioner is bound to release a person on bail against a bail bond. The bail conditions should be informed in writing to the arrested person and also on telephone to the nominated person of the person arrested. The arrested person should also be allowed to talk to the nominated person and for an offence specified under sub-section (5) of Section 132 of the CGST Act, 2017, the officer authorized to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty four hours.

Reports to be sent:

•  DGGI/ Chief Commissioner(s)/Chief Commissioner(s) shall send a report on every arrest to Member as well as to the Zonal Member within 24 hours of the arrest giving details to maintain an all India record of arrests made in CGST, from September, 2022 onwards, a monthly report of all persons arrested in the Zone shall be sent by the Principal Chief Commissioner(s)/Chief Commissioner(s) to the Directorate General of GST Intelligence.