Justice M M Nerlikar at the Nagpur Bench of the Bombay High Court has strongly criticised the procedure adopted by the Directorate General of GST Intelligence (DGGI) while arresting a suspect in a GST case. The court termed the procedure an “abuse of the process” and said it amounted to “giving go-by to the mandates of Section 69” of the Central Goods and Services Tax Act. Justice Nerlikar made the observations while hearing the anticipatory bail plea of Sanket Santosh Sahu, who was apprehended in a case registered under Section 132 of the CGST Act. The court noted that Sahu and Bhavesh Chandrakant Gandhi had earlier approached it for anticipatory bail. The plea was withdrawn after the department pointed out that an order under Section 69 of the Act was necessary before arrest. However, the court was later informed of the manner in which Gandhi was arrested.

 

Gandhi attended the DGGI office on August 31 for interrogation. According to the submissions before the court, he was detained there until the next morning. An order under Section 69 was passed at around 9.20 am on September 1. The order was then served on him while he was already in custody. He was shown as arrested at around 10.30 am. The High Court questioned this procedure. It observed that calling a person for interrogation, detaining him overnight, passing the Section 69 order the next morning and then serving the order while he was in custody prima facie frustrated the very purpose of Section 69. Justice Nerlikar said the department appeared to have adopted an ‘innovative procedure’ in which a person was first detained and the statutory order was passed later.

 

“If such a practice is permitted, the department would make Section 69 redundant,” the court observed. The court clarified that it was not deciding Gandhi’s case. However, it considered these facts while deciding whether Sahu’s anticipatory bail plea could be entertained. Since no Section 69 order had been passed against Sahu, the court granted him interim protection. It directed that Sahu be released on interim bail in the event of arrest on furnishing a personal bond of Rs 1 lakh with two solvent sureties of the same amount. Sr Adv A S Mardikar and Adv P M Vishwarupe represented the applicant while Spl Adv Kunal Nalamwar for the non-applicant/Department.