Power of arrest of GST authorities is Constitutional/Delhi HC
In a recent judgment, the Delhi High Court upholds the constitutional validity of section 69 and 132 of the ‘Central Goods and Services Tax Act (CGST). These sections empower the authorities to arrest any person if the reasonable ground exists that the person is guilty of tax invasion.
The opposite party raised the contentions that:
- The provisions are criminal in nature and cannot be enacted under article 246A.
- The power of arrest is not incidental and ancillary to the power of levy and collection of tax. Hence both the provisions are unconstitutional.
The court held that:
- The law makes the presumption in favour of the constitutionality of any law. And, if anyone wants to prove the contrary, the burden of proof is on such a person.
- Section 246A has a wider scope. It not only empowers the state and central legislature to levy and collection of taxes but also empowers to make any law with respect to goods and services tax. Hence the word “GST” under section 246A has a wider meaning and also includes the power to make criminal laws with respect to GST.
- While applying the theory of ‘Pith and Substance’ the court held that the power to arrest is incidental and ancillary to the power to levy and collect taxes. When one law deals with the one subject touch the subject of another list, the true object of legislation shall take into consideration.
- The court further held that the word ‘criminal law’ under list III means every kind of criminal law except clear exclusions.
Read the judgment @ https://www.livelaw.in/pdf_upload/dhruv-387310.pdf
What is GST
Goods and Services Tax Council is a constitutional body for making recommendations to the Union and the state government on the issues relating to the Goods and Service Tax. The chair of this council is the Union Finance Minister and the other members include the Union State Minister of Revenue or Finance and also the Ministers in charge of the Finance or the Taxation of all the states.
The Lok Sabha passes the bill on 8th august 2016 and the Rajya Sabha on 3rd August 2016. The Hon’ble President of India gave assent to the bill on 8th September 2016 and it was notified as to the Constitution (One Hundred and First Amendment) Act, 2016.
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