Introduction
The Central Board of Indirect Taxes and Customs (‘CBIC’) has, in pursuance of the judgment passed by the Hon’ble Delhi High Court in Kshitij Ghildiyal v. Directorate General of GST Intelligence, Delhi[i], inter alia, specific other precedents, amended instruction no. 2/2022-23, vide the present instruction[ii] (‘Instruction’), to detail the procedure that has to be followed while making an arrest under s. 69 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’).
The revised Instruction mandates that the arrested individual be informed of the grounds of arrest both orally and in writing. Additionally, these grounds must be annexed to the arrest memo filed by the GST department. This amendment aims to ensure strict compliance with judicial directives and safeguard the constitutional rights of arrested individuals.
Key Amendments Introduced by the Instruction
The issuance of this Instruction stems from judicial observations in multiple cases.
In Kshitij Ghildiyal v. Directorate General of GST Intelligence, Delhi (supra), the Hon’ble Delhi High Court, while relying upon the judgement of the Hon’ble Supreme Court in Prabir Purkayastha v. State (NCT of Delhi)[iii] and Pankaj Bansal v. Union of India & Ors.[iv] reaffirmed the necessity of procedural due process in arrests under the GST framework.
The Court emphasized that the grounds of arrest must be communicated in writing to the arrested person. It also distinguished between ‘reasons for arrest’ and ‘grounds of arrest’:
Reasons for arrest are general justifications for detaining an individual, such as preventing further offenses or ensuring proper investigation.
Grounds of arrest, however, are specific and personal to the accused, detailing the factual basis of the arrest and enabling the individual to defend themselves, oppose custodial remand, and seek bail.
To align with these judicial directives, Para 4.2.1 of the previous instruction[v] has been amended to explicitly require that:
The arrested individual be provided grounds of arrest in writing.
These grounds be explained to them at the time of arrest.
An acknowledgement of receipt be obtained from the arrested individual.
Our Analysis
This amendment marks a significant step toward greater transparency and procedural fairness in GST-related arrests. By mandating that the grounds of arrest be communicated in writing and acknowledged, CBIC reinforces compliance with constitutional and judicial mandates.
However, while this Instruction ensures procedural compliance in principle, its practical enforcement remains uncertain. The extent to which GST investigation officers adhere to this directive will become evident only through judicial scrutiny and legal challenges in the coming months.
End Notes
[i] 2024 SCC OnLine Del 8949.
[ii] Instruction No. 01/2025-GST [GST/INV/INSTRUCTION/21-22] dated 13.01.2025.
[iii] 2024 SCC OnLine SC 934.
[iv] 2024 SCC OnLine SC 1244.
[v] No. 2/2022-23 GST (Investigation) dated 17.8.2022.
Authored by Yadavi Malhotra, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions.