Supreme Court on GST Summons & Anticipatory Bail: Summoned Persons Must Appear; Section 438 Not Available at Summons Stage (Later Held Not Binding in Radhika Agarwal) [State of Gujarat v. Choodamani Parmeshwaran Iyer, 2023]

The Supreme Court set aside a Gujarat High Court order that had, in effect, protected persons summoned under Section 70 of the CGST Act from arrest. It held that a person summoned under the CGST Act for recording of statement cannot invoke Section 438 CrPC (anticipatory bail), since no FIR is registered before the power of arrest under Section 69(1) is invoked; the only remedy against pre-arrest coercion is the High Court's writ jurisdiction under Article 226, which must be exercised sparingly. The respondents were given one more opportunity to appear (paras 11–20).

Important – later development: In Radhika Agarwal v. Union of India, 2025 INSC 272, a three-Judge Bench held that anticipatory bail can be sought on a reasonable apprehension of arrest even before an FIR, and that decisions in the context of the GST Acts contrary to that ratio – expressly naming State of Gujarat v. Choodamani Parmeshwaran Iyer – should not be treated as binding (para 70 of Radhika Agarwal). Readers must read this order together with Radhika Agarwal.

Headnote

Goods and Services Tax — Summons and arrest — Anticipatory bail — Writ jurisdiction — CGST Act, 2017, Ss. 69, 70, 132; Central Excise Act, 1944 (as applied by S. 83 of the Finance Act, 1994); Code of Criminal Procedure, 1973, Ss. 41, 41A, 438; Constitution of India, Art. 226.

Persons summoned under S. 70 of the CGST Act (and the service tax law) repeatedly failed to appear; the High Court, on their writ petitions apprehending arrest, directed the Department to complete adjudication in eight weeks and gave them further protection — Held, it was expected of the respondents to honour the summons; the power of arrest under the GST Act is statutory and ordinarily the writ court should not interfere with it; no condition should ordinarily be imposed before effecting arrest; a person summoned under the CGST Act cannot invoke S. 438 CrPC as no FIR is registered before S. 69(1) is invoked, and the only remedy is Art. 226, to be exercised sparingly in exceptional cases; observations of the Telangana High Court in P.V. Ramana Reddy approved. High Court order set aside; one more opportunity to appear. [See Radhika Agarwal, 2025 INSC 272, para 70: this decision, to the extent contrary, not to be treated as binding.]

(Paras 11–20)

Judgment Intelligence

Key Holdings

• Persons summoned are expected to honour the summons and appear for interrogation (para 11).
• The power of arrest under the GST Act is statutory; ordinarily the writ court should not interfere with its exercise (para 12).
• Ordinarily no condition should be imposed before effecting arrest, as that would render the statutory power nugatory (para 14).
• A person summoned under the CGST Act cannot invoke Section 438 CrPC; the only remedy against pre-trial arrest is Article 226, to be used sparingly (paras 16–17). This proposition has since been held not binding in Radhika Agarwal (2025 INSC 272, para 70).

Brief Facts

Summons dated 31.10.2018 were issued to the respondents under the Central Excise Act, 1944 (as applied to service tax by Section 83 of the Finance Act, 1994) and Section 70 of the CGST Act, in an inquiry into alleged evasion relating to M/s Iyer Enterprise, Mundra, Kutch (para 4). Apprehending arrest, they filed writ petitions before the Gujarat High Court, which by a common order dated 24.12.2018 directed the authority to complete adjudication within eight weeks and gave them a further two weeks thereafter (para 7). The State appealed; the Supreme Court stayed the eight-week direction on 29.04.2019 (paras 8–9). As many as 14 summons had been issued to one respondent, who appeared only once; the inquiry had remained pending for about five years (para 10).

Issue

1. Whether the High Court was justified in granting pre-arrest protection to persons summoned under the CGST Act and in directing completion of adjudication within a fixed time?

Court's Findings

Duty to appear: The Court was not convinced by the manner in which the High Court disposed of the petitions; the respondents were expected to honour the summons (para 11).

Nature of the arrest power: Arrest can be made only where the Commissioner has reasons to believe that an offence under clauses (a) to (d) of Section 132(1) has been committed; the power is statutory and the writ court should ordinarily not interfere. Relying on Padam Narain Aggarwal, the Court held that pre-conditions such as prior notice before arrest render the power meaningless (paras 12–15).

Anticipatory bail and writ: Since no FIR is registered before Section 69(1) is invoked, a person summoned cannot invoke Section 438 CrPC; the remedy lies under Article 226, which, following Kartar Singh, must be exercised sparingly and not to prevent an officer from performing statutory functions (paras 16–17).

P.V. Ramana Reddy approved: The Court agreed with the Telangana High Court's observations on the incongruities between Sections 69 and 132 and on the safeguards of Sections 41 and 41A CrPC (para 18).

Final Outcome / Directions (paras 19–20)

• Respondents given one more opportunity to appear for recording of statements; if they fail, the authority may proceed in accordance with law.
• Appeals allowed; Gujarat High Court's common order dated 24.12.2018 set aside.

Legal Principle

As stated in this order: persons summoned under the CGST Act must comply, and protection against arrest at the summons stage could be sought only under Article 226 in exceptional cases. However, the anticipatory bail proposition in this order has since been held not binding by a three-Judge Bench in Radhika Agarwal (2025 INSC 272), which holds that anticipatory bail is available on reasonable apprehension of arrest even before an FIR.

Precedents Relied Upon

• Union of India v. Padam Narain Aggarwal, (2008) 13 SCC 305 – Relied upon · Discussed at paras 13–15: no pre-conditions before statutory arrest.
• Kartar Singh v. State of Punjab, (1994) 3 SCC 569 – Relied upon · Discussed at para 17: pre-arrest protection under Article 226 to be exercised sparingly.
• P.V. Ramana Reddy v. Union of India (Telangana High Court, 18.04.2019; SLP (Crl.) No. 4430 of 2019 dismissed on 27.05.2019) – Approved · Discussed at para 18.
• Gurbaksh Singh Sibbia v. State of Punjab – Referred to (as quoted in Padam Narain Aggarwal) · para 15.

Important Paragraphs of the Judgment

Para 11: "We are not convinced with the manner in which the High Court has disposed of both the writ applications filed by the respondents. It was expected of the respondents to honour the summons and appear before the authority for the purpose of interrogation."

Para 16: "Thus, the position of law is that if any person is summoned under Section 69 of the CGST Act, 2017 for the purpose of recording of his statement, the provisions of Section 438 of Criminal Procedure Code, 1908 cannot be invoked. We say so as no First Information Report gets registered before the power of arrest under Section 69(1) of the CGST Act, 2017 is invoked and in such circumstances, the person summoned cannot invoke Section 438 of the Code of Criminal Procedure for anticipatory bail. The only way a person summoned can seek protection against the pre-trial arrest is to invoke the jurisdiction of the High Court under Article 226 of the Constitution of India…"

Para 19: "We are still inclined to give one more opportunity to both the respondents to appear before the authorities for the purpose of recording of their statements. If the respondents fail to appear, then it shall be open for the authority concerned to proceed further in accordance with law."

Note: Paragraph 16 is reproduced as it appears in the order (including the reference to "Section 69" and "Criminal Procedure Code, 1908").

What the Ruling Means: Practical Impact

• Read with Radhika Agarwal: On anticipatory bail, the later three-Judge Bench decision in Radhika Agarwal (2025) governs; this order should not be cited for the proposition that anticipatory bail is unavailable at the summons stage.
• Summons must be honoured: The Court's insistence that summoned persons appear and cooperate remains a strong caution; repeated non-appearance weighs heavily against the taxpayer.
• No blanket protection: Courts should not impose conditions such as prior notice before arrest or fix timelines for adjudication as a means of protecting persons from a statutory arrest power.

Frequently Asked Questions

Is anticipatory bail available in GST cases after Choodamani Parmeshwaran Iyer?

This order said it was not available at the summons stage. But the later three-Judge Bench in Radhika Agarwal (2025 INSC 272) held anticipatory bail is available on reasonable apprehension even before an FIR, and that this order, to the extent contrary, is not binding (para 70 of Radhika Agarwal).

Must a person summoned under Section 70 CGST appear?

Yes. The Court held that the respondents were expected to honour the summons and appear for interrogation (para 11).

Can a High Court order that a summoned person will not be arrested without prior notice?

The Court, relying on Padam Narain Aggarwal, held that ordinarily no such condition should be imposed before a statutory arrest (paras 14–15).

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Download Judgment: State of Gujarat v. Choodamani Parmeshwaran Iyer, 17.07.2023 (PDF, sci.gov.in)

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