The Allahabad High Court has quashed the arrest of two petitioners under the Health Security se National Security Cess Act, 2025, holding that the authorities’ failure to communicate the “reasons to believe” underlying the arrest violated their fundamental rights under Articles 21 and 22 of the Constitution.
The bench of Justice Atul Sreedharan and Justice Achal Sachdev held that placing the recorded reasons before the Magistrate during remand proceedings cannot substitute for supplying them to the person facing arrest. The court directed the petitioners’ immediate release, unless they were wanted in another case.
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The proceedings arose from an investigation by the DGGI’s Meerut Zonal Unit into alleged unauthorised manufacturing and operation of unregistered packaging machines for pan masala and chewing tobacco.
According to the factual account recorded in the judgment, the alleged activities were being carried out by M/s DNA Products and M/s Pan Samrat Group at premises in Garhi Khusro, Village Hiranki, New Delhi, in contravention of the HSNS Cess Act.
The authorities searched the two firms on July 16, 2026. Their proprietors, Jitender Kumar and Anil Kumar, allegedly disclosed that the petitioner was managing the affairs of both businesses.
The petitioner’s father’s residence was also searched, but nothing was recovered. A separate search of the petitioner’s premises continued overnight. Counsel for the petitioners submitted that the only document seized there concerned a ₹3 lakh loan purportedly advanced by the petitioner to Jitender Kumar. These submissions formed part of the petitioners’ challenge; the court’s eventual decision rested on the legal requirements governing arrest.
The central issue concerned Section 26 of the HSNS Cess Act.
The court explained that the provision requires a proper officer, not below the rank of Commissioner, to have reasons to believe that the person proposed to be arrested has committed one of the specified offences under Section 18. Once that satisfaction is reached, the officer may authorise another proper officer to execute the arrest.
The bench distinguished the functions of the two officers. The authorising officer must form the requisite belief based on the material before him. The officer executing the arrest carries out that authorisation and communicates the grounds of arrest.
The dispute was whether the underlying reasons recorded by the authorising officer also had to be disclosed to the person concerned.
The petitioners relied principally on the Supreme Court’s decision in Union of India v. Sunil Biyani, 2026 INSC 849.
As discussed by the High Court, that judgment required the reasons supporting an arrest authorisation under Section 69 of the CGST Act to refer to the underlying material and evidence, demonstrating application of mind. It also recognised the need to communicate the order and reasons so that the person concerned could seek anticipatory bail and challenge the exercise of the arrest power.
The High Court explained that withholding the arrest authorisation and its reasons would leave a person unable to effectively exercise those remedies. Communication also enables constitutional courts to examine the authorisation through judicial review.
The bench held that Section 26 of the HSNS Cess Act contains materially similar arrest provisions and that the principle must therefore extend to arrests under that legislation.
The DGGI argued that Sunil Biyani did not govern the present case because the petitioners’ arrest preceded that judgment. It contended that Supreme Court judgments should operate prospectively.
Rejecting the submission, the High Court explained that a constitutional court’s interpretation ordinarily applies retrospectively unless the judgment expressly restricts its operation to the future.
The bench reasoned that judicial interpretation explains an existing law rather than creating a new statutory provision. Consequently, the legal position clarified by the Supreme Court applied even though the arrest had occurred before that clarification.
The authorities also relied on the coordinate bench decision in Jai Kumar Aggarwal v. Directorate General of GST Intelligence and Others, 2026:AHC:32796-DB.
In that case, the coordinate bench had rejected the argument that recorded reasons to believe must be supplied to the accused, observing that the Commissioner had to record those reasons but that no provision mandated their disclosure.
The present bench held that the position had changed following the subsequent Supreme Court judgment in Sunil Biyani. The later ruling expressly recognised disclosure as necessary to enable the person concerned to seek anticipatory bail.
Accordingly, the earlier coordinate bench decision did not prevent the court from applying the law subsequently clarified by the Supreme Court.
The decisive factual circumstance was that the reasons to believe had not been served on the petitioner even by the time the High Court heard the matter. The respondents did not dispute this.
They instead submitted that the reasons had been placed before the Magistrate, who considered them and granted remand.
The High Court held that this procedure did not satisfy the requirement of communicating the reasons to the accused. The purpose of disclosure was to enable the person concerned to use those reasons when seeking anticipatory bail and challenging the arrest authorisation. Their consideration by the Magistrate could not fulfil that purpose.
The court concluded that the failure to communicate the reasons violated the petitioners’ rights under Articles 21 and 22 and rendered the arrest invalid.
The respondents pointed out that the district court had rejected the petitioners’ bail application while the habeas corpus petition was pending.
The High Court held that this did not affect their right to maintain the petition. It distinguished the grounds for seeking bail from those supporting a habeas corpus challenge under Article 226.
The bench also noted an apparent timing discrepancy in the arrest memo. The document appeared to have been digitally signed and uploaded at 10:30 p.m. on July 17, 2026, while recording the arrest at 11:12 p.m. The court observed that the memo had therefore been prepared nearly 45 minutes before the recorded arrest. Its operative ruling, however, rested on the failure to communicate the reasons to believe.
Quashing the arrest, the court ordered the petitioners’ release forthwith, subject to their not being required in any other case, and disposed of the writ petition.
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