The Supreme Court has held that a High Court or Sessions Court, after dismissing a petition seeking pre-arrest or anticipatory bail, cannot grant additional protection against arrest for a specified period as an interim measure and arrest order under Section 69 must be communicated.
At the same time, the bench of Justice Dipankar Datta and Justice Sheel Nagu clarified an important safeguard under the Central Goods and Services Tax Act, 2017 (CGST Act), ruling that an arrest authorised under Section 69 of the CGST Act must be communicated to the person concerned before arrest, enabling him to exercise the legal remedy of seeking pre-arrest bail.
The case arose out of a DGGI investigation concerning M/s Alphaneon Techsolutions Pvt. Ltd. and its group entities. The investigation related, among other allegations, to wrongful availment and passing of Input Tax Credit (ITC) without actual supply of goods or services, circular invoicing and non-payment of GST on import of services.
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During an inspection of the registered premises, the respondent was present and acknowledged the inspection. Subsequently, the Department issued three summonses under Section 70 of the CGST Act requiring his appearance.
Instead of appearing pursuant to the summonses, the respondent sought adjournments and thereafter approached the Sessions Court at Mumbai seeking anticipatory bail. That application was rejected on October 14, 2025.
The respondent subsequently approached the Bombay High Court. Pursuant to interim directions issued by the High Court, he appeared before the Department and his statement was recorded.
Before the High Court, the Department stated that no order under Section 69 of the CGST Act had yet been passed, as the investigation was still at a nascent stage and material facts were being verified.
The Bombay High Court rejected the respondent’s application for anticipatory bail. It reasoned that since no order under Section 69 authorising arrest had been passed, there could be no immediate apprehension of arrest and consequently an application for pre-arrest bail could not be entertained.
However, despite rejecting the application, the High Court granted protection from arrest for one week from the date on which the respondent was informed of any order passed under Section 69 of the CGST Act.
The Union of India challenged this protective portion of the High Court’s order before the Supreme Court. Significantly, the respondent did not challenge the High Court’s rejection of his prayer for pre-arrest bail.
The Supreme Court first dealt with the legal position concerning a person summoned during a GST investigation.
Relying on its earlier judgment in Radhika Agarwal v. Union of India, the Court reiterated that mere issuance of summons under Section 70 of the CGST Act does not make the summoned person an accused.
The Court noted that a person summoned under Section 70 is not, merely by virtue of being summoned, an accused entitled to claim the constitutional protection under Article 20(3). At the same time, the investigation must proceed in accordance with law and there must be no misuse of investigative powers.
Consequently, since the respondent had only been summoned when he approached the High Court for pre-arrest bail, the Supreme Court affirmed the rejection of his anticipatory bail application.
The central issue before the Supreme Court was whether the High Court, after holding that the pre-arrest bail application was not maintainable, could nevertheless grant protection against arrest for one week.
The Supreme Court answered the question in the negative.
The Court relied upon the settled principle that interim relief can only be granted in aid of, and as ancillary to, the main relief sought in a proceeding. It referred to the Constitution Bench decision in State of Orissa v. Madan Gopal Rungta and subsequent decisions applying the same principle.
The Court also considered Hema Mishra v. State of U.P., where the Supreme Court had held that once a petition seeking quashing of an FIR or charge-sheet was dismissed, the High Court could not continue or grant further interim protection against arrest.
The Supreme Court observed that the same principle must apply to applications for pre-arrest bail.
The Court held that when a petition seeking pre-arrest bail is dismissed on the ground that it is not maintainable, the High Court or Sessions Court cannot extend or grant protection which is in the nature of interim relief that could have been granted while the application was pending.
Accordingly, the Supreme Court set aside the one-week protection from arrest granted by the Bombay High Court.
The ruling therefore draws a clear distinction between protection granted while a bail application is pending and protection granted after the application itself has been dismissed. Once the Court has rejected the substantive request for pre-arrest bail, it cannot continue the protective umbrella merely to give the applicant additional time.
While deciding the appeal, the Supreme Court proceeded to consider a related question of considerable importance: whether an order passed by the Commissioner under Section 69 of the CGST Act authorising arrest must be communicated to the person sought to be arrested.
Section 69 empowers the Commissioner, where there are reasons to believe that a person has committed specified offences under Section 132 of the CGST Act, to authorise an officer of central tax to arrest that person.
The Supreme Court emphasised that the Commissioner’s order must be preceded by “reasons to believe”, which in turn must be based on the underlying material and evidence and must demonstrate application of mind.
The Court examined the argument that a person cannot seek anticipatory bail until a Section 69 order authorising arrest exists.
It agreed with the proposition that a Section 69 order is a sine qua non for maintaining an application seeking pre-arrest bail in this context.
According to the Court’s reasoning, merely being under investigation or having received a summons does not by itself activate an apprehension of arrest under Section 69. The legal position changes once the Commissioner records the requisite “reasons to believe” and passes an order authorising arrest. At that point, the person concerned becomes exposed to arrest and acquires the basis to seek appropriate pre-arrest protection.
The Supreme Court, however, rejected any interpretation under which the Department could pass a Section 69 arrest authorisation but keep the order undisclosed until after arrest.
The Court accepted the respondent’s contention that communication of the Section 69 order is necessary. Since the existence of the order is a prerequisite for seeking anticipatory bail, it would create an anomaly if the person were not informed of the order and were instead arrested without having an opportunity to invoke the available legal remedy.
The Court specifically held that communicating the Section 69 order would not obstruct the GST investigation. Rather, it would reinforce the individual’s right to seek anticipatory bail.
In reaching this conclusion, the Supreme Court referred to the Constitution Bench judgment in Gurbaksh Singh Sibbia v. State of Punjab, which recognised personal liberty as an important consideration in the law governing anticipatory bail.
The Court noted that denial of bail involves deprivation of personal liberty and that unnecessary restrictions should not be imposed on the statutory mechanism governing anticipatory bail. It also referred to the constitutional requirement that a procedure resulting in deprivation of liberty must be fair, just and reasonable.
The Supreme Court said that this reasoning further strengthened the accused’s right to challenge both the Section 69 order and the “reasons to believe” recorded by the Commissioner.
According to the Court, the Section 69 order is amenable to judicial review by constitutional courts. If the reasons underlying the arrest authorisation were withheld, it could have serious consequences for the individual’s right to liberty.
The Court also addressed the practical manner in which the Section 69 order can be communicated.
It noted that Rule 8 of the CGST Rules, 2017 requires a person seeking GST registration to provide an email address and mobile number. Consequently, the Court observed that the Section 69 order may be communicated electronically, in addition to other modes permissible under the Bharatiya Nagarik Suraksha Sanhita (BNSS) and other applicable modes of communication.
This, the Court said, would enable the person concerned to pursue the legal remedy available to him, if so advised.
The Supreme Court ultimately directed the Commissioner to communicate the Section 69 order to the respondent in the manner indicated by the Court.
Importantly, the Court stated that until such communication takes place, the question of arrest would not arise. This forms a significant procedural safeguard for persons facing potential arrest under the GST law.
The ruling therefore establishes two distinct principles: first, a person cannot seek anticipatory bail merely because he has received a GST summons when no Section 69 arrest order exists; and second, once a Section 69 arrest authorisation is passed, it must be communicated before the person can be arrested, so that the statutory and constitutional remedies available to him are not rendered illusory.
The Supreme Court made it clear that its observations were confined to the legal issues necessary for deciding the appeal and did not constitute any finding on the facts or merits of the underlying investigation.
The pending GST investigation was directed to proceed uninfluenced by the observations contained in the judgment. The criminal appeal was accordingly disposed of on the terms laid down by the Court.
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