The Supreme Court asked the Centre to furnish details of issuance of notices and arrests done under the provisions of the Goods and Services Tax, saying it may interpret the law and lay down appropriate guidelines to avoid any harassment of citizens by depriving their liberty.
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NEW DELHI: The Supreme Court directed the Central Government to provide detailed information on the notices issued and arrests made under the Goods and Services Tax (GST) Act. This request comes amidst concerns regarding the potential misuse of power and the ambiguous nature of certain provisions within the GST Act that could lead to harassment of citizens.
During a special hearing conducted by Justices Sanjeev Khanna, MM Sundresh, and Bela M Trivedi, the Court addressed concerns over Section 69 of the GST Act, which pertains to the powers of arrest. The bench is currently overseeing 281 petitions that challenge various aspects of the GST Act, Customs Act, and provisions of the Prevention of Money Laundering Act (PMLA).
The justices expressed a willingness to “interpret the law to strengthen the liberty, if need be,” underscoring their intent to safeguard individual freedoms against undue harassment.
“You furnish the data on notices issued and arrests made under the GST Act for alleged defaults of Rs 1 crore to Rs 5 crore respectively for the past three years. There can be harassment of people and we won’t permit that. If we find there is ambiguity in the provision, we will set it right. Second, people can’t be sent behind bars in all the cases,”
-the bench directed Additional Solicitor General SV Raju, who represented the Centre.
The urgency of this data request was echoed by senior advocate Siddharth Luthra, representing some of the petitioners. Luthra highlighted the concerning trend of harassment through the issuance of notices and the threat of arrest, without proper adjudication to confirm the alleged tax defaults.
“Sometimes arrests are not made, but people are harassed by issuing notices to them, threatening arrest,”
-Luthra argued, emphasizing the need for due process before any curtailment of liberty occurs.
The bench also emphasized the need for comprehensive data from the GST Council, indicating that any ambiguity in the provisions should be corrected to prevent misuse.
“We want all the data. The GST Council will have those data. If the data is available, we want it before us,”
-they asserted, making a clear distinction between genuine cases of fraud and minor or inadvertent lapses that should not lead to severe penalties such as imprisonment.
Additionally, the bench discussed the need for procedural fairness, suggesting that individuals arrested under the GST Act should be provided with written grounds for their arrest, similar to protocols established under the PMLA.
“In the PMLA case, this court has made it mandatory to provide grounds of arrest to the accused in writing. A similar arrangement can be made under the GST as well,”
-the justices noted.
The matter is scheduled for further hearing on May 9, where the ASG, SV Raju, has committed to addressing the court’s inquiries regarding the collection and analysis of the requested data.
This proactive stance by the Supreme Court highlights its commitment to ensuring that enforcement of tax laws does not infringe upon the fundamental rights of individuals, setting a significant precedent for the balance between state authority and personal liberty in India.
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