In our previous articles, we discussed inspection, search, seizure and also offences and penalties, and prosecution. In this article, we will discuss the arrest under GST.
When can someone be arrested under GST?
If the Commissioner of CGST/SGST believes a person has committed an offence u/s 132, he can be arrested by any authorised CGST/SGST officer
The arrested person will be informed
about the grounds of his arrest. He will appear before the magistrate
within 24 hours in case of a cognizable offence.
What are the offences u/s 132 where arrest provisions become applicable?
Offences u/s 132 where arrest provisions become applicable-
- A taxable person supplies any goods/services without any invoice or issues a false invoice
- He issues any invoice or bill without supply of goods/services in violation of the provisions of GST
- He collects any GST but does not submit it to the government within 3 months
- Even if
he collects any GST in contravention of provisions, he still has to
deposit it to the government within 3 months. Failure to do so will be
an offence under GST
- He has already been convicted of an earlier u/s 132 i.e., this is his 2nd offence
On reading section 132 with arrest
provisions, it essentially stands that a person can be arrested only
where the tax evasion is more than 100 lakhs rupees or where a person
has earlier been convicted of an offence u/s 132.
What is the difference between a cognizable and a non-cognizable offence?
Cognizable offences are those where the
police can arrest a person without any arrest warrant. They are serious
crimes like murder robbery, counterfeiting. Non-cognizable offences are
those, where a police officer cannot arrest a person without a warrant
issued by the competent authority. They are less serious crimes like a public
nuisance, assault.
Cognizance of an offence under GST
A court cannot take cognizance of any
offence punishable without the prior permission of the designated
authority. Only a Magistrate of the First Class (and above) can try such
an offence.
Is bail available?
For non-cognizable and bailable offences, the arrested person can be released on bail.
Who can summon someone for evidence?
The proper officer can summon any person to give evidence or produce a document.
Any person summoned, has to attend on his own or through an authorized representative. They will appear under oath.
Who can access business premises and inspect books?
The
Joint Commissioner of CGST/SGST will authorise a CGST/SGST officer to
have access to any place of business of a registered taxable person. The
officer can inspect books of account, documents, computers and other
required things to carry out an audit, verification in the interest of
revenue.
Which officers are required to assist CGST/SGST officers?
All officers of –
- Police
- Railways
- Customs
- State/Central Government officers engaged in the collection of GST
- Officers collecting land revenue
- Village officers
—-are required to assist the CGST/SGST officers.
The Commissioner of CGST/SGST can also require any other class of officers to assist the CGST/SGST officers.
Opinion
The provisions of seizure and arrest seem rather harsh as GST is economic legislation, i.e., tax law and not criminal legislation.
The Commissioner has the power to arrest on the basis of reasons to believe. The wording is subjective (i.e., depending on the opinion).
An honest taxpayer who, for example, did not pay GST because he
genuinely believed GST was not applicable to him might get his goods
seized and get arrested. It could be a case of wrong interpretation of
the law for which penalty might apply but arrest seems too harsh. GST
law should have more clarity on the occasions when a person can be
arrested considering that it is a new law and there are bound to be
genuine errors.