[Opinion] Mandate of ‘Grounds of Arrest’ Now in GST Too!!
- Blog|News|GST & Customs|
- 2 Min Read
- By Taxmann
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- Last Updated on 31 January, 2025
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Dr. Nipun Singhvi & Abhishek Chopra – [2025] 170 taxmann.com 781 (Article)
In a landmark judgement, Delhi High Court laid down applicability of communication of ‘Grounds of Arrest’ in cases of GST arrests akin to guidelines issued by Supreme Court in judgments relating to arrest under Prevention of Money Laundering Act, 2002 (“PMLA”) and the Unlawful Activities Prevention Act (“UAPA”).
Though the judgement in the matter of Kshitij Ghildiyal v. Director General of GST Intelligence, Delhi [2024] 169 taxmann.com 446 (Delhi) draws corollary in relation to grounds of arrest communication, it analyses the need and procedure to be followed in an unchartered territory of GST arrests.
Following this judgment, the Central Board of Indirect Taxes and Customs (CBIC) issued revised guidelines on January 13, 2025, mandating that the grounds of arrest must be explained to the arrested person and furnished in writing as an annexure to the arrest memo, with acknowledgment obtained from the arrested individual.
This article makes an attempt to discuss the latest law laid down in case of arrest and bail. It has been matter of debate that the recent special laws where specific provisions of arrest and bail are not enumerated.
Factual matrix
The petitioner, Kshitij Ghildiyal, is a director of M/s Wee-Pro Resource Recovery Solutions Pvt. Ltd., a company engaged in e-waste management.
On November 28, 2024, the GST authorities conducted a search under Section 67 of the CGST Act at the company’s premises, seizing unaccounted stock. Allegations were made that the petitioner fraudulently availed ITC worth Rs. 10.76 crores using fake invoices without actual supply of goods.
- Search and Detention
- The petitioner was taken to the GST office in Dwarka on November 28, 2024, without being informed of the reasons for his detention.
- He was detained at the office, his mobility restricted, and his phone cloned without consent.
Arrest and Remand
- On the night of November 29-30, 2024, the petitioner was arrested under Section 132(1)(c) of the CGST Act.
- He was produced before the Chief Judicial Magistrate on November 30, 2024, and remanded to judicial custody for 13 days.
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