The Justice suggested that, arrested individuals should generally be granted bail, reflecting the legislative intent.
SC Justice Urges Caution by GST Authorities: Encouraging GST authorities to exercise careful consideration and thorough examination before proceeding with the arrest of businessmen for tax evasion, Supreme Court Justice Ujjal Bhuyan emphasized the importance of distinguishing between mere suspicion and substantial evidence. Speaking at the National Tax Conference held at the Federation of Telangana State Chamber of Commerce and Industries Bhavan in Hyderabad, Justice Bhuyan, an esteemed expert in tax laws, stressed the need for concrete reasons to justify such extreme actions.
“In the context of arrests under Section 69 of the Central Goods and Services Tax (CGST) Act, 2017, and provisional attachment under Section 83 of the CGST Act, it is crucial to understand the legal nuances,” Justice Bhuyan remarked. “The expression ‘reason to believe’ plays a pivotal role in these provisions, although it is not explicitly defined in the CGST Act. There must be a clear and direct link between the reasons documented and the evidence gathered.”
Justice Bhuyan highlighted that while the CGST Act primarily serves as a revenue legislation, it should not be equated with a purely penal statute. In instances of Section 132(1) violations, he suggested that arrested individuals should generally be granted bail, reflecting the legislative intent.
The provisions outlined in Sections 69 and 83 of the CGST Act, alongside corresponding provisions in State GST enactments, grant significant powers to the revenue authorities. “While it is imperative for the revenue to combat tax evasion effectively, the application of these provisions should be free from arbitrary decisions or biases,” Justice Bhuyan emphasized.
Acknowledging the potent nature of these legal tools, he advised a cautious and measured approach in their utilization. “As the severity of these provisions invites heightened judicial scrutiny, they should be deployed judiciously and sparingly,” he added.
Joining the discourse, Telangana High Court Chief Justice Alok Aradhe shared a quote from philosopher Kautilya, likening tax collection to that of a honey bee gathering nectar from flowers.
In conclusion, Justice Bhuyan’s remarks underscored the necessity for a balanced and fair application of the law in cases of suspected tax evasion, ensuring that individuals are afforded their rights while addressing revenue concerns effectively.
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