Top Stories GST Investigation Wing issues Guidelines for Arrest and Bail under GST Provisions [Read Instruction] Now, the grounds for arrest must be explained and furnished in writing to the arrested person as an annexure to the arrest memo. Acknowledgment of receipt is mandatory By Manu Sharma – On January 14, 2025 11:20 am – 3 mins read The GST Investigation Wing has released Instruction No. 01/2025-GST, detailing updated guidelines for arrest and bail under the CGST Act, 2017.

These amendments are issued in line with the Delhi High Court judgment in Kshitij Ghildiyal vs. Director General of GST Intelligence, Delhi (2024). The court had emphasized that the grounds for arrest must be clearly communicated in writing to the accused. Read More: Delhi High Court rescinds Arrest of ITC Fraud-Accused Company Director, notes Discrepant Procedure by GST Dept In the decision, the Delhi High Court discussed at length the procedures adopted by the GST Department while conducting arrest, and condemned the mechanical approach purported by the Magistrate in affirming the judicial custody.

Take Your SME to the Next Level with IPO Insights – Click here to Register The Respondent Department, represented by Senior Standing Counsel Anurag Ojha, with Dipak Raj, Vipul Kumar, Karan Aggarwal, Shubham Kumar and Deepak Somani claimed that their sole obligation was to ‘inform’ the Petitioner about the grounds which had been effectuated through the Arrest Memo even though the memo had no explicit heading titled “Grounds of Arrest”. “The single-judge Bench of Justice Anish Dayal observed that the petitioner had just been orally informed about the grounds of arrest; the nature scope and expanse of the information had not been documented; no written grounds of arrest had been given during arrest or prior to remand and that the remand application with no “specific grounds of arrest” had been handed over to the petitioner just prior to the hearing before the Magistrate. Citing the decisions of the Supreme Court in Pankaj Bansal v. Union of India (2024), Prabir Purkayastha v. State, NCT Delhi (2024) and Arvind Kejriwal v. Directorate of Enforcement (2024) the Division Bench observed the development of the jurisprudence of arrest requirements under the Prevention of Money Laundering Act, 2002 (PMLA Act) and Unlawful Activities (Prevention) Act, 1967 (UAPA Act). Take Your SME to the Next Level with IPO Insights – Click here to Register As per the Constitutional Peg under Article 22(1) of the Constitution of India, any person being detained shall be informed “as soon as may be” of the relevant grounds, and in writing as per the above-mentioned Supreme Court decisions.

Observing that the when the liberty of a person is at stake, the investigation/arresting agency must exercise precaution, exactitude, and punctiliousness, the Delhi High Court rebuked the observation of the Magistrate order wherein it was merely noticed that the grounds of arrest had been explained to the accused persons and that the Investigating Officers had completed codal requirements and shown justifiable grounds of arrest without sufficient reasoning and application of mind.

In conclusion, Justice Anish Dayal allowed the Petition, holding the arrest to be illegal while ordering the release of the Petitioner from Judicial Custody. Additionally, the High Court clarified that the present decision is a judicial review of the arrest and not an opinion of the merits of the GST Authorities case against the Petitioner.” Take Your SME to the Next Level with IPO Insights – Click here to Register

The distinction between “reasons for arrest” and “grounds of arrest” is critical. The “reasons for arrest” address formal justifications like preventing further offenses or tampering with evidence. In contrast, “grounds of arrest” are specific to the accused and must be shared in detail, providing an opportunity to contest custodial remand or seek bail. The Para 4.2.1 of the earlier Instruction (No. 02/2022-23 GST) has been revised.

Now, the grounds for arrest must be explained and furnished in writing to the arrested person as an annexure to the arrest memo. Acknowledgment of receipt is also made mandatory. This amendment protects the rights of individuals concerned during GST-related investigations and arrests.