# THE STATE OF GUJARAT ETC v. CHOODAMANI PARMESHWARAN IYER & ANR. ETC

- **Citation:** [2023] 8 S.C.R. 1139
- **Court:** Supreme Court of India
- **Decided:** 2023-07-17
- **Case number:** Criminal Appeal Nos. 1963-64 of 2023
- **Bench:** J. B. Pardiwala, Prashant Kumar Mishra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-state-of-gujarat-etc-v-choodamani-parmeshwaran-iyer-anr-etc-37541
- **Pages:** 10

## Headnote

Central Goods and Services Tax Act, 2017 - s.69 - Summons
issued under - Invocation of s.438, CrPC by the person summoned
- Impermissibility of - Held: If any person is summoned u/s.69,
2017 Act for the purpose of recording of his statement, the provision
of s.438, Cr.PC cannot be invoked - The only way a person
summoned can seek protection against the pre-trial arrest is to invoke
the jurisdiction of the High Court u/Art.226 - This is exactly what
the respondents did in the present case - By filing criminal
applications u/Art. 226 before the High Court, the respondents
sought direction to the appellant not to arrest them in exercise of
the power conferred by s.69(1), 2017 Act - This, in essence, was
prayer for anticipatory bail - However, at the stage of summons,
the person summoned cannot invoke s.438, CrPC - Power to arrest
a person by an empowered authority under the GST Act is statutory
in character and ordinarily the Writ Court should not interfere with
exercise of such power - Impugned order directing the concerned
authority to complete the adjudicatory process within 8 weeks and
give two more weeks to the respondents for taking necessary steps
if there was a need for any apprehension and if they were not ready
to fulfill their obligation, set aside - However, one more opportunity
given to both the respondents to appear before the authorities for
recording their statements - On their failure to appear, authority to
proceed in accordance with law - Code of Criminal Procedure,
1973 - s.438 - Constitution of India - Article 226 - Central Excise
Act, 1944 - s.145 - Finance Act, 1994 - s.83.
Constitution of India - Article 226 - Application for pre-arrest
protection under - Held: There is no bar for the High Court to
entertain an application for pre-arrest protection u/Art.226 however,
such power should be exercised sparingly - There is a fundamental
distinction between a petition for anticipatory bail and the writ of
[2023] 8 S.C.R. 1139
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mandamus directing an officer not to effect arrest - A writ of
mandamus would lie only to compel the performance of the statutory
or other duties - No writ of mandamus would lie to prevent an officer
from performing his statutory function - When a writ application is
filed before the High Court u/Art.226 , the writ court owes a duty to
examine the fact of the case and ascertain whether the case of the
writ applicant falls under the category of exceptional cases as
indicated in Kartar Singh case.
Kartar Singh vs. State of Punjab (1994) 3 SCC 569 :
[1994] 2 SCR 375 - followed.
Union of India vs. Padam Narain Aggarwal and Ors.
(2008) 13 SCC 305 : [2008] 14 SCR 179 - relied on.
P.V. Ramana Reddy vs. Union of India (2021) 2 SCC
784 - referred to.
Case Law Reference
[2008] 14 SCR 179
relied on
Para 13
[1994] 2 SCR 375
followed
Para 17
(2021) 2 SCC 784
referred to
Para 18

## Text

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THE STATE OF GUJARAT ETC.
v.
CHOODAMANI PARMESHWARAN IYER & ANR. ETC.
(Criminal Appeal Nos. 1963-64 of 2023)
JULY 17, 2023
[J. B. PARDIWALA AND
PRASHANT KUMAR MISHRA, JJ.]
Central Goods and Services Tax Act, 2017 - s.69 - Summons
issued under - Invocation of s.438, CrPC by the person summoned
- Impermissibility of - Held: If any person is summoned u/s.69,
2017 Act for the purpose of recording of his statement, the provision
of s.438, Cr.PC cannot be invoked - The only way a person
summoned can seek protection against the pre-trial arrest is to invoke
the jurisdiction of the High Court u/Art.226 - This is exactly what
the respondents did in the present case - By filing criminal
applications u/Art. 226 before the High Court, the respondents
sought direction to the appellant not to arrest them in exercise of
the power conferred by s.69(1), 2017 Act - This, in essence, was
prayer for anticipatory bail - However, at the stage of summons,
the person summoned cannot invoke s.438, CrPC - Power to arrest
a person by an empowered authority under the GST Act is statutory
in character and ordinarily the Writ Court should not interfere with
exercise of such power - Impugned order directing the concerned
authority to complete the adjudicatory process within 8 weeks and
give two more weeks to the respondents for taking necessary steps
if there was a need for any apprehension and if they were not ready
to fulfill their obligation, set aside - However, one more opportunity
given to both the respondents to appear before the authorities for
recording their statements - On their failure to appear, authority to
proceed in accordance with law - Code of Criminal Procedure,
1973 - s.438 - Constitution of India - Article 226 - Central Excise
Act, 1944 - s.145 - Finance Act, 1994 - s.83.
Constitution of India - Article 226 - Application for pre-arrest
protection under - Held: There is no bar for the High Court to
entertain an application for pre-arrest protection u/Art.226 however,
such power should be exercised sparingly - There is a fundamental
distinction between a petition for anticipatory bail and the writ of
[2023] 8 S.C.R. 1139
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mandamus directing an officer not to effect arrest - A writ of
mandamus would lie only to compel the performance of the statutory
or other duties - No writ of mandamus would lie to prevent an officer
from performing his statutory function - When a writ application is
filed before the High Court u/Art.226 , the writ court owes a duty to
examine the fact of the case and ascertain whether the case of the
writ applicant falls under the category of exceptional cases as
indicated in Kartar Singh case.
Kartar Singh vs. State of Punjab (1994) 3 SCC 569 :
[1994] 2 SCR 375 - followed.
Union of India vs. Padam Narain Aggarwal and Ors.
(2008) 13 SCC 305 : [2008] 14 SCR 179 - relied on.
P.V. Ramana Reddy vs. Union of India (2021) 2 SCC
784 - referred to.
Case Law Reference
[2008] 14 SCR 179
relied on
Para 13
[1994] 2 SCR 375
followed
Para 17
(2021) 2 SCC 784
referred to
Para 18
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
Nos. 1963-1964 of 2023.
From the Judgment and Order dated 24.12.2018 of the High Court
of Gujarat at Ahmedabad in SCRA Nos. 11010 and 11076 of 2018.
Kanu Agarwal, Ms. Deepanwita Priyanka, Madhav Sinhal, Advs.
for the Appellants.
K. M. Nataraj, ASG, R. P. Gupta, Mukesh Kumar Maroria,
Prashant Singh I, V. Balaji, Ms. Manjula Gupta, Shailesh Madiyal, Sharath
Nambiar, Advs. for the Respondents.
The following Order of the Court was passed:
ORDER
1. Leave granted.
2. The learned counsel appearing for the private respondents
(Assessees) submitted that he is not in a position to assist this Court as
his clients are not in touch with him past almost six months.
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3. In view of the aforesaid, we had no benefit of any assistance
from the learned counsel appearing for the private respondents.
4. We have heard Mr. Kanu Agrawal, the learned counsel
appearing for the State of Gujarat.
5. It appears from the materials on record that a summons came
to be issued dated 31.10.2018 to the respondents under Section 145 of
the Central Excise Act, 1944 (for short "the Act 1944") as made applicable
to the service tax vide Section 83 of the Finance Act, 1994 and Section
70 of the Central Goods and Service Tax Act, 2017 (for short "the CGST
Act 2017") calling upon them to remain present for the purpose of
interrogation in connection with an inquiry against one M/s. Iyer Enterprise
Mundra Kutch. The authority concerned wants to interrogate the
respondents in regard to the alleged evasion of Goods and Service Tax
Liability/Contravention of the Provision of the Finance Act 1994 and
CGST Act 2017.
6. Upon receipt of the summons, the respondents apprehended
arrest at the end of the concerned officials of the Department.
7. In such circumstances as referred to above, two writ
applications came to be filed before the High Court being Special Criminal
Application Nos. 11010 of 2018 and 11076 of 2018 resply. Both the writ
applications came to be disposed by a common order dated 24.12.2018.
The relevant part of the impugned order reads thus:-
"7. Considering the voluntary nature of pleadings where the
petitioners are desirous of getting themselves assisted by the
adjudicatory process, let them represent their case before the
concerned authority. The authority concerned shall complete
the same in 8 weeks' time and if there is a need for any
apprehension after once the adjudicatory process is
completed, if they are not ready to fulfill their obligation, they
may be given an opportunity of two more weeks for taking
necessary steps. Petitioners shall appear on or before 11/01/
2019 before the concerned Police Station.
In view of the above, the present applications stand
disposed of. Direct service is permitted."
8. The State of Gujarat being dissatisfied with the aforesaid order
passed by the High Court is here before this Court with the present
appeal.
THE STATE OF GUJARAT ETC. v. CHOODAMANI
PARMESHWARAN IYER & ANR. ETC.
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9. For the first time, this Court took up the matter on 29.04.2019
and issued notice. While issuing notice, this Court granted relief staying
the directions issued by the High Court that the adjudicatory process
must be completed within a period of eight weeks.
10. The learned counsel appearing for the State of Gujarat pointed
out that as many as 14 summons have been issued to one of the
respondents. Only once, one of the respondents appeared for the purpose
of interrogation. Thereafter, none of the respondents appeared before
the authority. It's been now 5 years that the inquiry is still pending. He
further submitted that it is only after the respondents are interrogated,
that the department will be able to ascertain whether there is any evasion
or not and on the basis of which the future course of action like filing of
complaint etc., would be decided.
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.
12. It is well-settled position of law that power to arrest a person
by an empowered authority under the GST Act and could be termed as
statutory in character and ordinarily the writ court should not interfere
with exercise of such power. We say so because such power of arrest
can be exercised only in those cases where the Commissioner or his
delegatee has reasons to believe that the person has committed any
offence specified in Clause (a) or Clause (b) or Clause(c) or Clause (d)
of sub-Section (1) of Section 132 which is punishable under clause (i) or
(ii) or sub-section (1) or sub-Section (2) of the said Section.
13. As observed by this Court in Union of India Vs. Padam
Narain Aggarwal and Ors. (2008) 13 SCC 305, (which was in context
with the powers of Custom Officers to arrest under the Customs Act)
such statutory powers must be exercised on objective facts of commission
of an offence enumerated and the officer concerned must have reason
to believe that a person sought to be arrested has been guilty of such an
offence.
14. This Court in Padam Narain Aggarwal (supra) made it very
clear that ordinarily the Court should not impose any condition before
effecting arrest. If any conditions are imposed before effecting arrest
for instance giving prior intimation to the person concerned etc., the
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statutory provisions would be rendered ineffective, nugatory and
meaningless.
15. What is important are the observations made in paragraphs
44 and 45 resply of the decision of this Court in the case of Padam
Narain Aggarwal (supra), which read thus:-
"44. In the case on hand, the respondents were only summoned
under Section 108 of the Act for recording of their statements.
The High Court was conscious and mindful of that fact. It,
therefore, held that the applications for anticipatory bail, in
the circumstances, were premature. They were, accordingly,
disposed of by directing the respondents to appear before
the Customs Authorities. The Court, however, did not stop
there. It stated that even if the Customs Authorities find any
non-bailable offence against the applicants (the respondents
herein), they shall not be arrested without ten days' prior notice
to them.
45. In our judgment, on the facts and in the circumstances of
the present case, neither of the above directions can be said
to be legal, valid or in consonance with law. Firstly, the order
passed by the High Court is a blanket one as held by the
Constitution Bench of this Court in Gurbaksh Singh and seeks
to grant protection to the respondents in respect of any nonbailable offence. Secondly, it illegally obstructs, interferes
and curtails the authority of the Customs Officers from
exercising statutory power of arrest of a person said to have
committed a non-bailable offence by imposing a condition of
giving ten days' prior notice, a condition not warranted by
law. The order passed by the High Court to the extent of
directions issued to the Customs Authorities is, therefore, liable
to be set aside and is hereby set aside." (Emphasis supplied)
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
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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. Undoubtedly, this is exactly
what the respondents did in the present case. What the respondents
sought by filing two criminal applications under Article 226 of the
Constitution before the High Court was the direction to the appellant
herein not to arrest them in exercise of the power conferred by Section
69(1) of the GST Act, 2017. This, in essence, is key to prayer for
anticipatory bail. However, as we have explained aforesaid, at the stage
of summons, the person summoned cannot invoke Section 438 of the
Code of Criminal Procedure.
17. This Court in Kartar Singh Vs. State of Punjab, (1994) 3
SCC 569, has, in no uncertain terms, observed that a claim for prearrest protection is neither a statutory right nor a right guaranteed under
Articles 14, 19 and 21 resply of the Constitution of India. Although the
Constitution Bench of this Court held that there is no bar for the High
Court to entertain an application for pre-arrest protection under Article
226 of the Constitution of India, yet it was held that such power should
be exercised sparingly. There is a fundamental distinction between a
petition for anticipatory bail and the writ of mandamus directing an officer
not to effect arrest. A writ of mandamus would lie only to compel the
performance of the statutory or other duties. No writ of mandamus would
lie to prevent an officer from performing his statutory function. When a
writ application is filed before the High Court under Article 226 of the
Constitution, the writ court owes a duty to examine the fact of the case
and ascertain whether the case of the writ applicant falls under the
category of exceptional cases as indicated in Kartar Singh (supra).
The writ court should also ensure whether by issuing the writ of
mandamus, it would be preventing the competent authority or proper
officer from performing any of their statutory functions.
18. In the aforesaid context, we may refer to a Division Bench
decision of the High Court of Telangana which ultimately came to be
affirmed by this Court in the Special Leave Petition (Crl.) No. 4430 of
2019 order dated 27.05.2019. We are referring to a decision in the case
of P.V. Ramana Reddy Vs. Union of India Writ Petition Nos. 4764 of
2019 and allied petitions decided on 18th April, 2019. There are few
important observations made by the High Court and we are in complete
agreement with the said observations. The observations of the High
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Court fell in the context of certain incongruities noticed in Section 69(1)
and Section 132 resply of the CGST Act, 2017. We quote the relevant
observations hereunder:-
"34. If CGST Act, 2017 is a complete code in itself in respect
of (1) the acts that constitute offences, (2) the procedure
for prosecution and (3) the punishment upon conviction, then
the power of Commissioner, who is not a Police Officer, to
order the arrest of a person should also emanate from
prescription contained in the Act itself. Section 69(1) of CGST
Act, 2017 very clearly delineates the power of the
Commissioner to order the arrest of a person whom he has
reasons to believe, to have committed an offence which is
cognizable and non-bailable. Therefore, we do not know how
a person whom the Commissioner believes to have committed
an offence specified in clauses (f) to (l) of sub-Section (1) of
Section 132 of CGST Act, which are non-cognizable and
bailable, could be arrested at all, since Section 69(1) of the
CGST Act, 2017 does not confer power of arrest in such cases.
35. The fact that the power of arrest under Section 69(1) of
the CGST Act, 2017 is confined only to cognizable and nonbailable offences, is also fortified by sub-Section (2) of Section
69 which obliges the Officer, who carries out the arrest to
inform the arrested person of the grounds of arrest and to
produce him before a Magistrate within 24 hours. The duty
enjoined upon the Officer carrying out the arrest, to inform
the arrested person of the grounds of arrest and to produce
him before a Magistrate within 24 hours, is co-relatable under
sub-Section (2) of Section 69 of the CGST Act, 2017 to Section
132(5) of the CGST Act, 2017 that deals only with cognizable
and non-bailable offences.
36. But, interestingly, clauses (a) and (b) of sub-Section (3)
of Section 69 of the CGST Act, 2017 deal in entirety only with
cases of persons arrested for the offences which are indicated
as non-cognizable and bailable. The phrase "subject to the
provisions of the Code of Criminal Procedure" is used only
in sub-Section (3), which deals in entirety only with the
procedure to be followed after the arrest of a person who is
believed to have committed a non-cognizable and bailable
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offence. While clause (a) of sub-Section (3) gives two options
to the Officer carrying out the arrest, namely, to grant bail by
himself or to forward the arrested person to the custody of
the Magistrate, clause (b) confers the powers of an Officer
incharge of a police station, upon the Deputy Commissioner
or the Assistant Commissioner (GST), for the purpose of
releasing an arrested person on bail, in the case of noncognizable and bailable offences.
37. In other words, even though Section 69(1) of the CGST
Act, 2017 does not confer any power upon the Commissioner
to order the arrest of a person, who has committed an offence
which is non-cognizable and bailable, sub-Section (3) of
Section 69 of the CGST Act, 2017 deals with the grant of
bail, remand to custody and the procedure for grant of bail
to a person accused of the commission of non-cognizable and
bailable offences. Thus, there is some incongruity between
sub-Sections (1) and (3) of Section 69 read with section 132
of the CGST Act, 2017.
38. Another difficulty with Section 69 of the CGST Act, 2017
is that sub-Sections (1) and (2) of Section 69 which deal with
the power of arrest and production before the Magistrate in
the case of cognizable and non-bailable offences, do not use
the phrase "subject to the provisions of Cr.P.C." This phrase
is used only in sub-Section (3) of Section 69 in relation to the
arrest and grant of bail for offences which are non-cognizable
and bailable, though no power of arrest is expressly conferred
in relation to non-cognizable and bailable offences.
39. It is important to note that under sub-Section (4) of
Section 132 of the CGST Act, 2017, all offences under the
Act except those under clauses (a) to (d) of Section 132 (1),
are made non-cognizable and bailable, notwithstanding
anything contained in Cr.P.C. In addition, Section 67(10)
of the CGST Act, 2017 makes the provisions of Cr.P.C.
relating to search and seizure, apply to searches and seizures
under this Act, subject to the modification that the word
"Commissioner" shall substitute the word "Magistrate"
appearing in Section 165 (5) of Cr.P.C., in its application to
CGST Act, 2017.
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40. Therefore, (1) in the light of the fact that Section 69(1) of
the CGST Act, 2017 authorizes the arrest only of persons who
are believed to have committed cognizable and non-bailable
offences, but Section 69(3) of the CGST Act, 2017 deals with
the grant of bail and the procedure for grant of bail even to
persons who are arrested in connection with non-cognizable
and bailable offences and (2) in the light of the fact that the
Commissioner of GST is conferred with the powers of search
and seizure under Section 67(10) of the CGST Act, 2017, in
the same manner as provided in Section 165 of the Cr.P.C.,
1973, the contention of the Additional Solicitor General that
the petitioners cannot take umbrage under Sections 41 and
41A of Cr.P.C. may not be correct.
41. Though for the purpose of summoning of witnesses and
for summoning the production of documents, the Proper
Officer holding the enquiry under the CGST Act, 2017 is
treated like a Civil Court, there are four other places in the
Act, where a reference is made, directly or indirectly, to the
Cr.P.C. They are (1) the reference to Cr.P.C. in relation to
search and seizure under Section 67(10) of CGST Act, 2017,
(2) the reference to Cr.P.C. under sub-Section (3) of Section
69 in relation to the grant of bail for a person arrested in
connection to a non-cognizable and bailable offence, (3) the
reference to Cr.P.C. in Section 132 (4) while making all
offences under the CGST Act, 2017 except those specified in
clauses (a) to (d) of Section 132 (1) of CGST Act, 2017 as
non-cognizable and bailable and (4) the reference to Sections
193 and 228 of IPC in Section 70(2) of the CGST Act, 2017.
Therefore, the contention of learned Additional Solicitor
General that in view of Section 69(3) of the CGST Act, 2017,
the petitioners cannot fall back upon the limited protection
against arrest, found in Sections 41 and 41A of Cr.P.C., may
not be correct. As pointed out earlier, Section 41-A was
inserted in Cr.P.C. by Section 6 of the Code of Criminal
Procedure (Amendment) Act, 2008. Under sub-Section (3) of
Section 41A Cr.P.C., a person who complies with a notice for
appearance and who continues to comply with the notice for
appearance before the Summoning Officer, shall not be
arrested. In fact, the duty imposed upon a Police
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Officer under Section 41A(1) Cr.P.C., to summon a person
for enquiry in relation to a cognizable offence, is what is
substantially ingrained in Section 70(1) of the CGST Act.
Though Section 69(1) which confers powers upon the
Commissioner to order the arrest of a person does not contain
the safeguards that are incorporated in Section 41 and 41A
of Cr.P.C., we think Section 70(1) of the CGST Act takes care
of the contingency.
42. In any case, the moment the Commissioner has reasons to
believe that a person has committed a cognizable and nonbailable offence warranting his arrest, then we think that the
safeguards before arresting a person, as provided in Sections
41 and 41A of Cr.P.C., may have to be kept in mind.
43. But, it may be remembered that Section 41A(3) of Cr.P.C.,
does not provide an absolute irrevocable guarantee against
arrest. Despite the compliance with the notices of appearance,
a Police Officer himself is entitled under Section 41A(3)
Cr.P.C., for reasons to be recorded, arrest a person. At this
stage, we may notice the difference in language between
Section 41A(3) of Cr.P.C. and 69(1) of CGST Act, 2017. Under
Section 41A(3) of Cr.P.C., "reasons are to be recorded", once
the Police Officer is of the opinion that the persons concerned
ought to be arrested. In contrast, Section 69(1) uses the phrase
"reasons to believe". There is a vast difference between
"reasons to be recorded" and "reasons to believe."
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.
20. In view of the aforesaid, both the appeals stand allowed. The
common order dated 24.12.2018 passed by the High Court is set aside.
21. Pending application(s), if any, stand(s) disposed of.
Divya Pandey
Appeals allowed.
(Assisted by : Shevali Monga, LCRA)