Economic offences: No embargo under CGST Act restraining pre-arrest bail, says Delhi High Court

NEW DELHI: The Delhi High Court has observed that there is no embargo under the Central Goods and Services Act, 2017 restraining a person apprehending arrest from seeking anticipatory bail.

Justice Chandra Dhari Singh said that though economic offences are grave in nature, the same does not mean that bail needs to be denied in every case.

“Section 70 (1) (of CGST Act) confers the power on the proper officer to summon any person whose attendance he considers necessary to either tender evidence or to produce documents etc. in any enquiry. Exercise of such a power is similar to the powers exercised by a civil court under the Civil Procedure Code, 1908. Sub-section (2) further clarifies that every inquiry in which summons are issued for tendering evidence or for production of documents is to be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Penal Code, 1860.

There is no embargo under the CGST Act restraining the petitioner from seeking prearrest bail.” The Bench added,

“Economic offences such as tax evasion, money laundering, etc. affect the economy of the country and thus are considered grave in nature. To deter persons from indulging in such economic offences, criminal sanctions are required to be imposed. One of the most prominent criminal sanctions imposed with regard to economic offences is that of arrest. It is widely acknowledged that arrests result in deprivation of liberty of a person. Thus, while it is imperative to maintain law and order in society, the power to arrest must also always be subject to necessary safeguards.”

Reliance was placed on Gurubaksh Singh Sibbia v.

State of Punjab, where the Supreme Court had held that Section 438 (anticipatory bail) of CrPC is a procedural provision which is concerned with the personal liberty of the individual, who is entitled to the benefit of the presumption of innocence since he is not, on the date of his application for anticipatory bail, convicted of the offence in respect of which he seeks bail.

The petitioner had approached the High Court under Section 438 of CrPC seeking anticipatory bail in a matter pertaining to allegedly availing and passing on ineligible/ fake Input Tax Credit, punishable under Section 132 of the CGST Act.