Guidelines for arrest and bail relating to punishable offences under the CGST Act, 2017

 

The GST Investigation Wing of CBIC has released Guidelines for arrest and bail relating to punishable offences under the CGST Act, 2017 on 17 August 2022 vide Instruction No.02/2022-23(GST Investigation).

The above instruction is aimed to ensure the judicious use of power to arrest an accused during the course of investigation by the officers in the backdrop of Supreme Court judgement dated 16 August 2021 in Criminal Appeal No.838 of 2021 arising out of SLP (Crl) No. 5442/2021.

The  summarised  instructions as under:

S. No	Subject Matter	Instructions
1.	Conditions precedent to arrest	►    The commissioner has been conferred power to arrest a person by virtue of Section 69(1) of the CGST Act,2017 when there are reasons to believe that any offence has been committed specified under Section 132(1)(a), 132(1)(b), 132(1)(c), 132(1)(d) which are punishable under section 132(1)(i), 132(1)(ii) or 132(2). ►    The reasons to believe to arrive at a decision to place an alleged offender under arrest should be unambiguous and must be based on credible material. ►    The arrest should not be made in routine and mechanical manner. ►    Even if all the legal conditions precedent to arrest are fulfilled, it will not mean that an arrest must be made unless the answer to any or some of the following questions is in the affirmative ·             Whether credible information or a reasonable suspicion exists of the person concerned in the non-bailable offence? ·             Whether the arrest is necessary to ensure proper investigation of the offence? ·             Where the person is not restricted, is he likely to tamper the course of further investigation or tamper with the evidence or intimidate or influence witnesses? ·             Whether the person is mastermind or key operator effecting proxy/benami transaction using fake GSTIN or non-existent person in order to pass fraudulent ITC? ·             Whether the presence of the person cannot be ensured unless he is arrested? ►    Approval to arrest to be granted only in the instances of intent to evade tax, commission of acts leading to wrongful availment/utilisation of ITC, fraudulent refund of tax, failure to pay amount collected as tax is evident and the element of guilty mind is highly apparent. ►    In essence, apart from the fulfilment of the legal requirements, the factors leading to arrest a person should be to ensure proper investigation and prevent the possibility of tampering with evidence or intimidating or influencing witnesses.    ►    Arrest not to be resorted to in cases where the demand of tax is based on a difference of opinion regarding interpretation of law (technical nature). ►    Other factors influencing the decision to arrest could be: ·             Prevalent practise of assessment ·             Compliance to summons ·             Furnishing of documents requisitioned ·             Not giving evasive replies ·             Voluntary payment of taxes
2.	Procedure for arrest	►    The Principal Commissioner/Commissioner to record reasons to believe that the person has committed offence specified u/s 132 after considering the nature of offence, the role person involved and evidence available. ►    The Principal Commissioner/Commissioner may authorise an officer of central tax to arrest the concerned person in conformation to the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) and also ensure that all the officers are fully familiar with these provisions. ►    Contents and format of the arrest memo should be as follows: ·             Compliant with the direction of Supreme Court in the case of D.K Basu v/s State of West Bengal, 1997 ·             Format of the arrest memo to be in lines with Circular No.128/47/2019-GST dated 23 December 2019 issued by the Board. ·             Arrest memo to indicate relevant section(s) of the CGST Act, 2017 and inapplicable provisions should be struck off. ·             The grounds of arrest to be noted in the memo and explained to the person under arrest. ·             The authorised/nominated person of the person under arrest to be immediately informed and the same to be noted in the memo ·             The arrest memo to be given to the person under arrest bearing proper acknowledgement, date and time of arrest. ►    When there are several arrests in a single case, a separate arrest memo to be made and provided to each person under arrest. ►    Communication issued by officers of CBIC to mandatorily bear Document Identification Number(DIN) in accordance with Circular No. 122/41/2019-GST issued by the Board. ►    Other modalities to be complied with at the time of arrest are: ·             A woman should by arrested only by a woman officer as per section 46 of Code of Criminal Procedure, 1973. ·             Medical examination of an arrested person soon after the arrest to be conducted only by a medical officer serving the Central or State government and in case of absence, by a registered medical practitioner. The above examination to be conducted only by a female medical officer/practitioner when the arrested person is a female. ·             Reasonable care of health and safety of the person arrested to be ensured by the person having custody of the accused. ·             Minimal use of force and publicity and absence of violence to be ensured during arrest. Further, the person arrested to be subject to reasonable restraint to prevent escape.
3.	Post arrest formalities	►    The procedures for different categories of offences as listed in Section 132(4) and 132(5) of the CGST Act, 2017 are: ·             Arrest u/s 69(1) for an offence specified u/s 132(4) of the CGST Act,2017 a.        Assistant/Deputy Commissioner is bound to release a person on bail against bail bond. The bail conditions to be informed in writing to the arrested person and over telephone to the nominated person. b.       The personal bail bond should be executed at an amount commensurate with the financial status of the arrested person along with an equal amount undertaken by one surety being local person of repute to ensure that the person appears before the investigating officer when required and not leave the country uninformed. c.        Where conditions to grant bail has not been fulfilled, the arrested person to be produced before the appropriate Magistrate with 24 hours of arrest. ·             Arrest u/s 69(1) for an offence specified u/s 132(5) of the CGST Act,2017 – The grounds of arrest to be informed to the person under arrest and shall be produced before a Magistrate within 24 hours of the arrest. ►    Bail bond to be executed in the format prescribed in the Code of Criminal Procedure, 1973(2 of 1974) ►    Prosecution complaint u/s 132 to be filed before the competent court within a definite time frame, preferably within 60 days of arrest where no bail is granted. ►    Bail register containing details of the case, person arrested, bail amount and surety amount to be maintained by every Commissionerate/Directorate.
4.	Submission of Reports	►    Report on every arrest to be sent to Member(Compliance Management) and Zonal member by the Principal Director General/Principal Chief Commissioner/ Chief Commissioner within 24 hours of arrest. ►    Monthly report of all persons arrested in the zone to be sent by the Principal Chief Commissioner/ Chief Commissioner  to the Directorate General of GST Intelligence headquarters, New Delhi within 5th of the succeeding month. ►    The complied Zone wise monthly reports to be sent to Commissioner (GST Investigation) within 10th of every month.