In a recent ruling, the Punjab and Haryana High Court dismissed a challenge to the constitutional validity of Sections 69 and 132 of the Haryana Goods and Services Tax Act, 2017 (HGST Act). The case, brought by Jiahua Declaration and Design Engineering India Pvt. Ltd. and others against the Union of India, questioned whether these sections, which empower authorities to summon, arrest, and prosecute under the GST regime, exceeded legislative competence and violated fundamental rights under Article 13 of the Indian Constitution.
The petitioners argued that these provisions went beyond the scope of taxing power and infringed on individual rights. However, the respondents contended that the Supreme Court had already settled this issue in a similar case, Radhika Agarwal v. Union of India, which upheld the validity of identical provisions under the Central Goods and Services Tax Act (CGST Act).
The High Court relied on this Supreme Court judgment, affirming that both Parliament and State Legislatures possess comprehensive authority under Article 246-A to legislate on GST and related matters. The Court emphasized that investigative and enforcement measures, including the power to arrest and prosecute, are essential components of the legislative framework for tax collection and are valid exercises of legislative power.
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Consequently, the High Court found the challenge to Sections 69 and 132 of the HGST Act unsustainable, as they align with provisions in the CGST Act previously upheld by the Supreme Court. The writ petition was dismissed, thereby affirming the constitutional validity of these sections within the HGST Act.
Order date: 01 Oct 2025
Parties: Jiahua Declaration and Design Engineering India Pvt. Ltd. & Ors. v. Union of India & Ors.
Facts –
- The petitioners challenged the constitutional validity of Sections 69 and 132 of the Haryana Goods and Services Tax Act, 2017 (“HGST Act”) as being beyond legislative competence and violative of Article 13 of the Constitution of India.
- The core contention was that provisions empowering authorities to summon, arrest, and prosecute under the GST regime exceeded the scope of taxing power and infringed fundamental rights.
- The respondents opposed the plea, submitting that the issue was settled by the Supreme Court in Radhika Agarwal v. Union of India (2025 SCC OnLine SC ___), which upheld identical provisions under the CGST Act.
Issue –
- Whether Sections 69 and 132 of the HGST Act, providing powers of arrest and prosecution, are ultra vires the Constitution and beyond the scope of Article 246-A?
Order –
- The Court relied on the Supreme Court’s authoritative judgment in Radhika Agarwal (2025), which held that Parliament and State Legislatures, under Article 246-A, have plenary powers to legislate on GST and all incidental matters.
- The power to investigate, summon, and arrest is ancillary to the power to levy and collect tax, forming part of the legislative field under Article 246-A.
- Enforcement provisions to curb tax evasion, including penalties and arrests, are valid exercises of legislative competence.
- The Court found the challenge to Sections 69 and 132 no longer sustainable, as the provisions under HGST are analogous to those in the CGST Act upheld by the Supreme Court.
- The writ petition was dismissed, affirming the constitutional validity of Sections 69 and 132 of the HGST Act.
