GST Instruction No. 1/2025: Guidelines for Arrest & Bail
As a critical update to Instruction No. 2/2022-23 GST (Investigation) dated 17 August 2022, the GST Investigation wing has released fresh guidelines regarding arrest and bail for offences punishable under the CGST Act, 2017. These guidelines are encapsulated in Instruction No. 1/2025-GST, issued on 13 January 2025. This instruction reflects evolving legal interpretations and procedural mandates influenced by recent judicial pronouncements.
Key Judicial Precedents
The Hon’ble High Court of Delhi, in the landmark case of Kshitij Ghildiyal vs. Director General of GST Intelligence, Delhi [W.P. (CRL) No. 3770/2024], delivered its judgment on 16 December 2024. The court emphasized the importance of communicating the grounds of arrest in writing to the individual being arrested. This ruling draws heavily from judgments by the Hon’ble Supreme Court in two pivotal cases:
- Pankaj Bansal vs. Union of India & Ors. (Criminal Appeal Nos. 3051-3052 of 2023; Special Leave Petition (Crl.) Nos. 9220-21 of 2023) decided on 3 October 2023.
- Prabir Purkayastha vs. State (NCT of Delhi) (Criminal Appeal (D. No. 42896/2023) decided on 15 May 2024).
These rulings have shaped the procedural landscape, clarifying distinctions between different types of arrest notifications.
Also Read: Supreme Court Justice Urges Caution by GST Authorities in Arrests for Tax Evasion
Distinction Between ‘Reasons for Arrest’ and ‘Grounds of Arrest’
A significant legal refinement stems from Prabir Purkayastha vs. State (NCT of Delhi). The Supreme Court’s judgment elaborates on the difference between “reasons for arrest” and “grounds of arrest”:
- Reasons for Arrest: These refer to general, formal criteria that justify an arrest, such as preventing further offences, ensuring proper investigation, safeguarding evidence, or preventing interference with witnesses.
- Grounds of Arrest: These are detailed, case-specific facts known to the Investigating Officer that necessitate the arrest. The grounds must be explicitly conveyed in writing to the accused, enabling them to prepare a defense against custodial remand and seek bail. Unlike general reasons, the grounds of arrest are personal and tailored to the individual’s circumstances.
The Supreme Court underscored that the grounds of arrest must be furnished in writing, allowing the accused to understand the factual basis of the arrest and respond appropriately.
Also Read: CBIC Guidelines to GST Officers to Avoid reckless Issuance of Notice
Revised Instructions on Arrest Procedures
In light of these judicial clarifications, Para 4.2.1 of Instruction No. 02/2022-23 GST (Investigation) has been revised as follows:
“The grounds of arrest must be explained to the arrested person and also provided in writing as an annexure to the Arrest Memo. Acknowledgement of receipt must be obtained from the arrested individual at the time of serving the Arrest Memo.”
Conclusion
The updated guidelines reflect a more transparent and rights-oriented approach to arrest and bail procedures under the CGST Act, 2017. Compliance with these instructions will help ensure adherence to legal standards, uphold individual rights, and foster greater procedural fairness in GST-related investigations.
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