July 2019


The Supreme Court Has Declared GST Violation A Cognisable Offence, With No Need For An FIR Or Option For Anticipatory Bail


On 30 May, 2019 a Supreme Court vacation bench of Chief Justice Ranjan Gogoi and Justice Aniruddha Bose instructed all High Courts to stop granting anticipatory bail to those who default on the Goods And Services Tax (GST).


Under the CGST Act, the law terms GST violations as a cognisable offence and provides power to the GST commissioner to arrest a person on the basis of "reasons to believe" that a person has committed the offence under Section 132 of the CGST Act.

Hence, "Under special criminal law enactments, it is a settled law that there is no prior need to register an FIR before starting investigation or arresting a person."

This argument was placed in court by solicitor general Tushar Mehta, arguing for the government.

The GST Commissioner Can Arrest A Person On The Basis Of "Reasons To Believe" A Person Has Committed Offence


The Centre had filed a bunch of appeals in the SC against a series of orders passed by the Bombay HC, which had granted pre-arrest bail to CGST Act violators on the ground that the CGST officials had not registered any FIR as warranted under the Criminal Procedure Code.

Challenging the Bombay HC's orders, solicitor general Tushar Mehta said Parliament had segregated CGST Act from the Criminal Procedure Code & provided a separate procedure for dealing with offenders. Mehta said the Bombay HC's orders had brought "functions of the directorate general of GST intelligence to a grinding halt".


The Bombay High court's orders were in fact contrary to those of a division bench of the Telangana HC, declared on April 18.

The Telangana high Court had upheld the authority and power of the commissioner of the Central Goods & Services Tax (CGST) to arrest, and rejected any interim relief to those accused of violating the CGST Act, 2017.

The central government argued that CGST officers were not police and hence not required to follow the provisions of the Criminal Procedure Code, which mandates registration of FIR prior to arrest.

CGST Officers Were Not Police - Hence FIR Not Required Prior To Arrest


A vacation bench of Chief Justice Ranjan Gogoi and Justice Aniruddha Bose said, "As different high courts of the country have taken divergent views in the matter, we are of the view that the position in law should be clarified by this court. Hence the notice."

Not disturbing the existing concessions granted by the Bombay High Court, the Apex Court said "As the accused-respondents have been granted the privilege of pre-arrest bail by high courts by the impugned orders, at this stage, we are not inclined to interfere with the same."

However, for all future CGST violations, the bench ruled "However, we make it clear that the high courts, while entertaining such requests in future, will keep in mind that the Supreme Court by order dated May 27 had dismissed the special leave petition filed against the judgment and order of the Telangana high court in a similar matter, wherein the high court of Telangana had taken a view contrary to what has been held by the high court (of Bombay) in the present case. Beyond the above, we do not consider it necessary to observe anything further," it said.

Senior advocate Mukul Rohatgi requested the CJI to delete the reference to the apex court upholding the Telangana HC order as it would "close all doors" for the accused under CGST Act to seek relief. The bench refused to oblige and said, "That is the whole idea n