The Supreme Court on Wednesday said that the state high courts, dealing with cases regarding anticipatory bail in connection with GST evasion, should keep in mind that it had upheld an order passed by Telangana High Court that the competent authority under the Central Goods and Services Tax Act has the legal power to arrest.
A vacation bench, headed by Chief Justice Ranjan Gogoi, observed that high courts have not taken a consistent view on granting anticipatory bail to individuals accused of GST evasion, and it is, therefore, necessary to clarify the position as per law with regard to the power of arrest underthe GST law.
Appearing for the Centre, Solicitor General Tushar Mehta cited different orders passed by different high courts in granting anticipatory bail to the accused, charged with GST evasion, on their pleas challenging arrest under the law.
In two Special Leave Petitions, the Centre has challenged the Bombay High Court's order, which citing the procedure laid down under the Criminal Procedure Code that the arrest cannot be made without fulfilling the requirement of registration of an FIR, granted interim relief to the accused.
The apex court, after hearing the arguments, agreed to examine the matter in detail on the petition filed by Centre, which challenged the legal validity of such orders.
Mehta contended that the accused persons usually moved the high court to secure ex-parte orders, and submitted to the court that the matter should be placed before a three-judge bench. The court agreed with the suggestion.
On May 27, in a big relief for the government, the Supreme Court dismissed a bunch of petitions, challenging power to arrest in cases of GST evasion. Matters involved allegations of evading GST by circular trading and claiming input tax credit through fake invoices.
The petitioners had moved the apex court challenging the Telangana High Court verdict that a person can be arrested by the authority concerned in cases of Goods and Service Tax evasion.
The petitions were listed for hearing before a vacation bench comprising Chief Justice Gogoi and Justice Aniruddha Bose, which, after hearing the initial arguments, said it is not willing to interfere with the high court's April 18 judgement.
"Upon perusing the relevant material, we are not inclined to interfere. The special leave petition is accordingly dismissed. Pending interlocutory applications, if any, shall stand disposed of," the court said.
The Telangana High Court in its order on April 18, said that it is not willing to grant any relief against arrest to the petitioners in light of summons issued by Superintendent (Anti-Evasion) of the Hyderabad GST Commissionerate under the Central Goods and Services Tax Act, 2017. The court did not entertain their plea challenging the summons.
The government informed the court that petitioners have allegedly incorporated various firms in partnership, and then on the basis of certain invoices, claimed input tax credit allegedly in the absence of any actual physical receipt depicting the nature of goods.
It was alleged that Rs 224.05 crore fraudulent input tax credit has been claimed by these companies. The batch of petitions was filed by some private companies, their top officials and others.
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