Power to issue summons under GST and can a person be arrested by the competent authority in cases of GST evasion: Telangana High Court

The Telangana High Court judgment in the case of P.V. Ramana Reddy Vs Union of India & Ors, (Special Leave to Appeal (Crl.) No. 4430/2019) through the learned bench led by Justices Ramasubramanian and, P.Keshava Rao, rejected the case challenging the power to issue summons under GST and held that any person can be arrested by the competent authority in cases of GST invasion and the same decision was later upheld by the Supreme court  of Indi.

Facts of the case: The petitioner was served a summon by the Superintendent u/s 70 of the CGST Act and the invocation of a penal provision under section 69 of the same Act. The petitioner has claimed to be guilty of circular trading by claiming ITC on material never purchased and such ITC was passed to companies to whom the goods were never sold.

Judgment:- According to the observation of the High court saying that the prosecution could be launched only after completing assessment, that would run contrary to Section 132, and offenses under this section are not correlated to assessment. According to sections 132(1)(b) and (c) issuing of invoice or bill without supplying goods and availing ITC by using those invoices has been made an offense under the given section and such offense does not depend upon completion of any assessment.

The Court rejected the petitioner’s claim of not arresting a person for an alleged offense that is compoundable and all technical objections raised were also rejected by the court. The High Court then observed that despite the petitions being maintainable Under sections 41 and 41A of CrPC, are available to the persons who are said to have committed a cognizable offense that is non-bailable, despite the findings of incongruities within Sections 69 and 132 of the Act, it was not inclined to grant relief to the petitioners.

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