Proceed with Caution and Conduct Thorough Investigations Before Arrests in GST Fraud Cases.
Justice Ujjal Bhuyan of the Supreme Court emphasized the necessity for GST authorities to conduct a thorough examination and exercise caution before proceeding with the arrest of businessmen on charges of tax evasion. In his address on Saturday, he underscored that mere suspicion should not be conflated with concrete belief as grounds for arrest.
He articulated that the drastic step of arresting an individual must be substantiated with robust evidence of tax evasion, with all reasons meticulously documented.
Speaking as the chief guest at the National Tax Conference held at the Federation of Telangana State Chamber of Commerce and Industries Bhavan, Justice Bhuyan, known for his expertise in tax laws, highlighted two significant concerns regarding the Central Goods and Services Tax (CGST) Act, specifically Section 69 regarding arrests and Section 83 concerning provisional attachment.
He pointed out the importance of the phrase “reason to believe,” which, though not explicitly defined within the CGST Act, plays a crucial role in various legal contexts. Justice Bhuyan stressed the necessity for a direct connection between the evidence collected and the reasons for suspecting tax evasion.
He further elaborated on the nature of the CGST as primarily focused on revenue generation rather than penal measures, implying that individuals accused under Section 132(1) should generally be eligible for bail.
Justice Bhuyan cautioned against the arbitrary application of Sections 69 and 83, as well as similar statutes under State GST laws, given their significant empowerment to tax authorities. He advocated for careful and judicious use of these provisions to prevent misuse.
Echoing these sentiments, Telangana High Court Chief Justice Alok Aradhe, who was present as a guest of honour, invoked the philosophy of Kautilya, comparing ideal tax collection practices to the gentle way in which a honey bee gathers nectar from flowers.
Source from: https://a2ztaxcorp.com/blogs/6602741f3360f45bafee1586/details