The Punjab and Haryana High Court has held that a GST arrest cannot be sustained where the authorities fail to establish that the Commissioner’s order authorising arrest under Section 69(1) of the CGST Act was communicated to the person before the arrest.
The bench of Justice Virinder Aggarwal noted that the Court also found that the authorities had breached a specific assurance, recorded in earlier judicial proceedings, to give seven working days’ notice if arrest became necessary.
Buy Now: E-Magazine: 1000+ Landmark GST Judgments (2017–2026)
GST officers began searching Bansal’s residence at about 5:54 a.m. on August 20, 2026. He joined the proceedings at about 6:15 a.m., and his statement was recorded under Section 70 of the CGST Act. His arrest was formally recorded at 11:30 p.m. that day. He was produced before a Magistrate at about 11:00 a.m. on August 21.
Bansal challenged his detention on three grounds. He argued that he had effectively been in custody from 6:15 a.m. during the search, so his production before the Magistrate exceeded the 24-hour limit under Article 22(2) of the Constitution. He also alleged that the arrest violated the earlier assurance of seven working days’ notice and that the mandatory requirements for arrest under Section 69 had not been met.
The GST authorities denied that he had been restrained before 11:30 p.m. They maintained that a search, summons and inquiry did not themselves amount to arrest. They also relied on summons previously issued under Section 70 to argue that the assurance regarding notice had been honoured.
The High Court rejected Bansal’s claim that his arrest began at 6:15 a.m. It said that custody can amount to arrest depending on the actual degree of restraint, but a person’s presence during a search does not, by itself, establish that their freedom of movement has been curtailed.
The record did not show that Bansal was physically restrained, prevented from leaving, denied access to his phone, or stopped after expressing a wish to leave. The Court also noted that his bail application had described the time of arrest as 11:30 p.m. on August 20.
The Court therefore calculated the 24-hour period from 11:30 p.m. As Bansal was produced before the Magistrate at about 11:00 a.m. the following day, it found no violation of Article 22(2) on this ground.
The Court then examined the authorities’ assurance that Bansal would receive seven working days’ prior notice if his arrest became necessary. The authorities pointed to summons issued on March 18 and April 22 under Section 70 of the CGST Act.
The Court explained that a Section 70 summons requires a person to attend an inquiry or provide evidence or documents. It does not, merely by being issued, tell that person that the competent authority has decided to exercise the separate power of arrest under Section 69. Nor could the passage of more than seven days between the summons and the eventual arrest satisfy the specific assurance given to the Court.
On the material before it, the High Court found that the arrest without a distinct seven-working-day notice was contrary to that assurance.
The High Court also considered the requirement, recognised in the Supreme Court’s ruling in Union of India v. Sunil Biyani, to communicate the Commissioner’s Section 69(1) arrest order before effecting an arrest. Such communication gives the person an opportunity to seek pre-arrest bail and challenge the basis of the proposed arrest.
In Bansal’s case, the arrest memo stated that the Commissioner had reasons to believe he had committed an offence under Section 132(1)(a) to (d) of the CGST Act and had authorised an officer to arrest him. However, the actual Section 69(1) order, the recorded reasons to believe, and the material underlying them were not placed on record by either side. The Court found no material establishing that the order had been communicated to Bansal before his arrest.
A recital in an arrest memo that reasons to believe existed could not, the Court held, establish compliance with the requirement to communicate the underlying order.
The High Court concluded that the arrest was vitiated from the outset because prior communication of the Section 69(1) order had not been established and the specific undertaking on seven working days’ notice had been breached. Subsequent remand orders could not cure those defects. It allowed the petition and directed Bansal’s release, subject to any other lawful basis for his custody.
Membership Required to Access Case Details & Order Copy
To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.
