In an important development, the Supreme Court on Wednesday (August 12) held that no arrest shall take place under the Central GST Act for alleged major tax evasions or fraud unless an order passed under Section 69 recording the 'reasons to believe' to arrest is communicated to the assessee.

"…the requirement of communication of the order passed under Section 69 of the CGST Act to the accused before he is arrested, has to be read into the statute and communication of such an order to the person sought to be arrested must be held to be mandatory.”, observed a bench of Justice Dipankar Datta and Justice Sheel Nagu.

As per Section 69 of the CGST Act, if the Commissioner has reasons to believe that a person has committed any specified offence, he may, by order, authorise any officer of central tax to arrest such person.

The Court ruled that this order must be communicated to the assesse, so that he can get to know the "reasons to believe" which led to his arrest.

The Court reasoned that if the requirement to communicate the Section 69 order is not read as a mandate in the statute, then it would have a drastic consequence towards the personal liberty of an assessee. According to the Court, communication of an order of arrest would enable an assessee to exercise the statutory right of a pre-arrest bail (anticipatory bail), which otherwise would not be possible unless an order of arrest is communicated to him, as no application seeking a pre-arrest bail would be maintainable unless an order of arrest under Section 69 is passed.

“…once the Commissioner concludes that there are “reasons to believe” that any offence of the nature stated in Section 69 has been committed warranting an arrest and an order to that effect is passed, the alarm is activated and the person (alleged to be the offender, whose arrest is authorised) becomes an accused who is open to be arrested and, thus, acquiring the right to seek pre-arrest bail. Consequently, an order under Section 69 of the CGST Act would be a sine qua non to maintain an application seeking such bail…If Section 69 were read as it is, without there being any requirement of disclosure of the “reasons to believe”, withholding of reasons could have drastic consequences on the right to liberty of the accused.”, the Court said.

Background

The Court was hearing an appeal filed by the Union of India against the Bombay High Court's judgment, which, while dismissing the assessee's quashing petition, granted a one-week interim relief from arrest to the assessee. The interim relief of one week was directed to operate from the date of passing of an order under Section 69 of the CGST Act.

While setting aside the High Court's grant of an interim relief at the quashing stage, the Court addressed a subsidiary question, i.e., whether the order passed by the Commissioner under Section 69 of the CGST Act is required to be communicated to the person sought to be arrested?

Before the Supreme Court, Sr. Adv. Gaurav Agarwal for the Respondent-assessee submitted that failure to communicate the order of an arrest under Section 69 of the CGST Act would render the remedy of a pre-arrest bail otiose, as no application seeking a pre-arrest bail would be maintainable for the non-communication of the arrest order.

Agreeing with his contention, the Court said:

“We are inclined to accept the contention of Mr. Agarwal. The order under Section 69 of the CGST Act, as held, being a sine qua non to seek anticipatory bail, it would be an anomaly to hold that the order need not be communicated at all, much less, be communicated after the arrest of such person. In any case, communication of the order would not, in any manner, obstruct the investigation ensued by the department. On the contrary, it reinforces the right of the accused to seek anticipatory bail as stipulated in Sushila Aggarwal v. State (NCT of Delhi).”

The Court said that an order under Section 69 “may be communicated through electronic means in addition to the mode, as permitted under the BNSS, as well as all other permissible modes of communication. This would enable an accused to seek remedy that the law provides to him, if so advised.”

Resultantly, the Union's plea was disposed of, with the following operative order:

“…we require the Commissioner to communicate the order under Section 69 of the GST Act to the respondent in the manner indicated in the preceding paragraph, whereafter he may pursue such remedy as he may be advised. We reiterate, without such communication, question of arrest would not arise.”

Headnote

Criminal Procedure — Anticipatory Bail / Pre-arrest Bail — Grant of interim protection while dismissing non-maintainable application — Impermissibility - An interim relief can only be granted in aid of and as ancillary to the main relief - While dismissing an application seeking pre-arrest bail on the ground that it is not maintainable (whatever be the ground therefor), neither the High Court nor the Sessions Court can extend or grant protection against arrest in the nature of interim relief that could otherwise be granted during the pendency of the application. [Relied On State of Orissa v. Madan Gopal Rungta, 1951 SCC 1024; Hema Mishra v. State of U.P., (2014) 4 SCC 453; Mangal Rajendra Kamthe v. Tahsildar, Purandhar, 2026 SCC OnLine SC 297; Paras 8 - 11]

Central Goods and Services Tax Act, 2017 — Section 70 — Summons — Status of a Summoned Person - Mere issuance of summons under Section 70 of the CGST Act does not per se make the person summoned an accused - The prohibitive sweep of Article 20(3) of the Constitution does not go back to the stage of interrogation, and in the absence of an order under Section 69, there can be no apprehension of arrest to maintain an application for anticipatory bail. [Relied on Radhika Agarwal v. Union of India, (2025) 6 SCC 545; Deepak Mahajan, (1994) 3 SCC 440; Poolpandi v. CCE, (1992) 3 SCC 259; Dukhishyam Benupani v. Arun Kumar Bajoria, (1998) 1 SCC 52; Sushila Aggarwal v. State (NCT of Delhi), (2020) 5 SCC 1; Gurbaksh Singh Sibbia v. State of Punjab, (1980) 2 SCC 565; Maneka Gandhi v. Union of India, (1978) 1 SCC 248; Paras 15-22]

Central Goods and Services Tax Act, 2017 — Section 69, Section 132 read with Central Goods and Service Tax Rules, 2017, Rule 8 — Code of Criminal Procedure, 1973, Section 438 / Bharatiya Nagarik Suraksha Sanhita, 2023, Section 482 — Power to Arrest — Requirement of prior communication of arrest order to the accused before arrest — Mandatory Nature - An order passed by the Commissioner under Section 69(1) of the CGST Act recording "reasons to believe" is a sine qua non for an accused to entertain an apprehension of arrest and maintain an application for anticipatory bail - Principles of natural justice, fairness in administrative action, and Article 21 require that communication of the arrest order under Section 69 to the person sought to be arrested is mandatory prior to arrest - The order may be communicated electronically (via email/mobile provided under Rule 8 of the CGST Rules), under BNSS provisions, or via other permissible modes - Without such communication, the question of arrest does not arise, so as to enable the accused to exercise their right to seek pre-arrest bail or judicial review of the reasons. [Paras 14–22].

Cause Title: UNION OF INDIA VERSUS SUNIL BIYANI

Citation : 2026 LiveLaw (SC) 797

Click here to download judgment

Appearance:

For Petitioner(s) : Mr. S. Dwarakanath, A.S.G. Mr. Gurmeet Singh Makker, AOR Mr. Rajat Vaishnav, Adv. Mr. Shrirang Verma, Adv. Mrs. Priyadarshni Priya, Adv. Ms. Medha Pushkarna, Adv.

For Respondent(s) : Mr. Gaurav Agarwal, Sr. Adv. Mr. Arjun Garg, AOR Ms. Amruta Arjun Garg, Adv. Ms. Arushi Kulshrestha, Adv. Ms. Mrinmoyee Das, Adv