JULY 30, 2025

GST - Arrest - Custody and Cameras

By Vijay Kumar

ON the quiet afternoon of June 4th, 2025, Bharat Lal Garg entered the DGGI office in Chandigarh at precisely 12:02 PM. By all appearances, it was a voluntary visit. But as the clock ticked past the twenty-four-hour mark, his whereabouts remained unknown to his family-and critically, unreported to any judicial authority.

Concerned by the silence and his absence, Barkha Bansal, his wife, approached the Punjab and Haryana High Court under Article 226, invoking the ancient writ of Habeas Corpus. The petition alleged unlawful custody. The court, sensing urgency, appointed a Warrant Officer.

What happened next cast a glaring spotlight on the corridors of tax enforcement. On June 5th, the Warrant Officer reached the DGGI premises, where Bharat Lal was found – allegedly injured, unproduced, and undocumented. No arrest memo in sight. Video clips showed injuries. The arrest memo and grounds of arrest surfaced only at 8:40 PM.

The Court observed,

1. The conduct of respondents and other officials of the Department is ex facie contemptuous as they have intentionally and maliciously misbehaved with the Warrant Officer and hindered him from discharging the official duty entrusted to him by this Court order dated 05.06.2025.

2. Further, as per the report of the Warrant Officer, the detenue remained in custody of respondents since 12:02 PM on 04.06.2025. He was only served with an arrest warrant at 8:40 PM the next day i.e. 05.06.2025.

3. It is evident that the detenue was produced before the jurisdictional Magistrate at 9:25 PM on 05.06.2025, beyond the stipulated period of 24 hours which is in direct contravention of his fundamental rights under Article 22 of the Constitution of India.

4. This Court cannot turn a Nelson's eye to such recalcitrant misconduct depicting a blatant disregard for the rule of law. Allowing such lawless to continue unchecked would undermine the authority and dignity of the justice administration mechanism.

On these troubling grounds, the court ordered the DGGI to file an affidavit detailing:

1. The names and roles of officers present during the entire episode.

2. CCTV status in the premises and access to footage.

3. Copies of the arrest memo, medical examination, and grounds of detention.

On 18.07.2025, when the next hearing took place, the Court observed that, the following questions arise for just adjudication of the controversy: CRWP-6077-2025 (O&M) [2025-TIOL-1193 -HC-P&H-GST]

1. Whether keeping a person, who has been summoned, overnight in the zonal office can be construed as voluntary and not violative of the constitutional safeguards?

2. Whether the arrest of a person summoned under the CGST Act, would be legally sustainable if there is a substantial non-compliance of Section 69 of the CGST Act by the DGGI officers while granting authorization for such arrest?

3. Whether the grounds of arrest need to be furnished to the person concerned when formal arrest is affected or when he is first put under restraint by DGGI officials?

Vanishing Cameras:

The DGGI claimed that CCTV systems malfunctioned due to construction at the premises. The Court found this explanation incongruous-while all digital systems like the E-office portal functioned perfectly, only the surveillance cameras seemed affected. In the absence of credible details about this "construction," the Court inferred a deliberate attempt to disable CCTV, violating Supreme Court directions. This inference wasn't merely technical-it signalled intent to obscure custodial actions from scrutiny.

On the issues raised, the Court observed:

KEEPING A PERSON SUMMONED, OVERNIGHT IN THE OFFICE

Curiously, a prima facie cognizable offence was yet to be made out against the detenue and in spite of that he was kept in the office overnight and subjected to prolonged interrogation. It does not stand to reason that the detenue, a family man, would voluntarily subject himself to such treatment. Further, at this stage only data had been extracted from the laptop of the detenue for forensic analysis. In absence of a cognizable offence, it was rather premature of the DGGI officials to entertain the idea of arrest, let alone justify it.

At time, erosion of fundamental rights is cloaked by procedural formalities and subtly, such circumstances are orchestrated where choice is essentially rendered illusionary. The very fact that the DGGI officials do possess the power to arrest is sufficient to induce a sense of fear and inhibition in the mind of the detenue, making the matter at hand a prime example of psychological coercion.

The constitutional promise of liberty is not a hollow one; therefore, it is the duty of this Court to ensure that the rights of a citizen are rendered merely theoretical.

A prolonged restraint and detention for an indefinite time, restricting free movement and personal liberty, ought to be construed as an arrest in the absence of authorization under Section 69 of the CGST Act.

Since the detenue was held in informal custody for an indefinite period, he is entitled to the protections available under Articles 21 and 22 of the Constitution of India.

COMPLIANCE OF SECTION 69 OF THE CGST ACT

The Courts are required to strike a balance between the reasonable needs of law enforcement agencies and protection of citizens from abuse of power. it is mandatory for the grounds of arrest along with 'reasons to believe' to be provided to the arrestee.

It is apparent that the designated officer is required to arrive at a conclusion of guilt based upon the 'material' examined.

It transpires that, admittedly, the designated officer (Additional Director General, Directorate of Goods and Service Tax Intelligence,) has passed a formal order on the basis of the arrest proposal made by the Intelligence Officer through E- office portal. However, neither has the designated officer made any recording on the file nor satisfaction after examining the relevant material has been expressed. Furthermore, authorization has been granted through digitally, without even seeing if the relevant material calls for an arrest.

This Court has no hesitation to observe that the designated officer merely gave authorization on the ipse dixit of the Intelligence Officer who forwarded the proposal to arrest through E-office portal. The approach adopted is mechanical in nature and does not reflect application of mind. Moreover, the record was not produced in Court and the affidavits of the Intelligence Officer and Additional Director General, do not contain any information regarding the issuance of the communication and authorization under Section 69 of the CGST Act along with the DIN (Document Identification Number). The failure to follow the drill mandated by law while granting authorization to arrest certainly vitiates the arrest as it suffers from an incurable illegality.

RELEVANT TIME WHEN GROUNDS OF ARREST IS TO BE COMMUNICATED

Admittedly, the detenue in question was put under restraint at 05:46 PM, when the process for his arrest was initiated. There is no dispute with regard to arrival of the detenue in the zonal office at 12:15 PM on 04.06.2025. The detenue was kept overnight in the office when, at that point in time, he was not even accused of a cognizable offence. However, his interrogation continued till 02:30 PM on 05.06.2025.

Firstly, the arrest of the detenue would be assumed to have commenced during his overnight detention at the zonal office, as he was deprived of his right to freedom of movement beyond the boundaries of the zonal office. Secondly, the DGGI officials ought to have communicated the grounds of his arrest to the detenue when they put him under restraint at 05:46 PM on 05.06.2025, after over 29 hours from his arrival in the zonal office. As such, the detenue was illegally detained for over 24 hours, in violation of his fundamental rights.

Furnishing the grounds of arrest to the arrestee is sacrosanct to the process of law and must be conveyed in writing, expeditiously as he possesses the right to be informed of the reasons for curtailment of his liberty. Failure to do the same would vitiate the processes of arrest and remand.

It is apparent that while DGGI officials put the detenue under restraint at 05:46 PM on 05.06.2025, they did not show any urgency in supplying the grounds of arrest to him. As such, the subsequent process of arrest and remand stand vitiated. Moreover, the DGGI officials also failed to supply the detenue with the 'reasons to believe that he has committed an offence under the CGST Act, necessitating his arrest.

Lastly, there is nothing available on the record that would prompt this Court to disbelieve the report of the Warrant Officer.

The Court further noted:

1. The statement of any person summoned by the DGGI must be recorded during office hours.

2. Further, the person so summoned is well within his rights to record his statement in the presence of his counsel.

3. The counsel may be present in the field of vision of the summoned person but not his hearing range.

4. Additionally, any person summoned to the DGGI may request his statement to be recorded under CCTV surveillance.

Positively not the end

The matter is listed on 30.07.2025 for further consideration. The Additional Director General of Goods and Service Tax Intelligence is directed to file an affidavit showing complete compliance of the directions regarding CCTV on or before the next date of hearing and also to deliberate therein why the directions issued by this Court regarding production of record are not complied with.