Arrests under GST

Value-added tax, service tax, and excise duty were replaced by the Goods and Services Tax (GST), which went into effect on July 1, 2017. This tax applies to both goods and services traded within India and essentially replaces the prior indirect tax structure. Now let’s examine the concept of arrests concerning GST.

When Can Someone Be Arrested Under GST?

If someone participates in any of the forbidden activities specified in Section 132, they may be arrested under the terms of the GST. Under such circumstances, any authorised official may arrest the offender following the Central Goods and Services Tax (CGST) or State Goods and Services Tax (SGST). This covers any illicit action involving the paperwork needed for GST registration.

When someone is taken into custody, they have to be told why they are being held. If the offence is found to be cognizable, which is a serious breach of the law, the arrested individual must appear before a magistrate within 24 hours. The person’s rights are safeguarded and due process is upheld because of this prompt appearance before a magistrate. It protects against arbitrary or illegal detentions and upholds the idea of prompt court involvement.

In essence, if it is found that someone has gravely broken GST law, a certified CGST or SGST official has the authority to make an arrest. An arrested person’s legal rights are safeguarded and impartial judicial procedures are ensured by the requirement that they appear before a magistrate within twenty-four hours. When it comes to crimes that are punishable by law, this requirement is extremely crucial.

What are the Offenses?

Section 132 of the GST Act lists the major crimes related to tax evasion and noncompliance, for which arrest guidelines are in effect. Those who commit these acts risk being arrested and facing harsh consequences. Let’s go into further detail about each of these offences:

  • Issuing a False or No Invoice: It is a major infraction for a taxable person to deliver products or render services without a bill or to intentionally issue a fraudulent invoice. According to the GST regulations, this conduct is illegal. It means deliberately dodging the proper documentation and record-keeping requirements that are necessary for responsible and open transactions within the GST framework.
  • Erroneous Bill or Invoice Issuance: It is illegal and a breach of the GST regulations to issue a fraudulent bill or invoice that purports to show the delivery of goods or services. This involves knowingly providing false information about transactions on documents, which may lead to tax evasion or other criminal activity.
  • Failure to File GST Returns: It is a serious violation to send your GST returns to the government after the allotted three months. The timely submission of GST returns is essential for keeping accurate tax records and guaranteeing total compliance with tax laws.
  • Mishandling of Collected GST: A person must pay the money to the government within three months of receiving GST from clients. When this requirement is not fulfilled, a GST violation occurs. This legislation prohibits individuals from gathering taxes but not paying them to the government, as this may lead to revenue loss and tax evasion.
  • Repeat Offence: Should an individual who has previously been found guilty of a Section 132 infringement under the GST go on to violate the same kind, they are guilty of a felony. This implies that those who have previously received punishment for major GST infractions and subsequently committed the same crime again would suffer harsher penalties.

In these cases, the goal is to ensure that appropriate tax procedures are adhered to, transparency is maintained, and individuals comply with the GST regulations. Arrest laws have the power to discourage tax evasion and promote legal compliance in specific cases. It’s important to keep in mind that these regulations are meant to prevent unfair or abusive taxation and preserve the integrity of the GST system.

Arrest Provisions under Section 132 of the GST Act

Section 132 of the GST Act outlines the procedures for arrest in cases of significant tax evasion. Specifically, an individual may face arrest if their tax evasion reaches the threshold of 200 lakhs (2 crores). This implies that the relevant authorities permitted by the GST Act may conduct an arrest if it is found that an individual has avoided paying taxes over this sum.

These steps guard against widespread tax evasion and guarantee that individuals who have previously been penalised for similar offences won’t break the GST regulations once more. The government implemented arrest procedures for major tax evasion and repeat offenders to protect the integrity of the tax system and encourage lawful compliance.

Cognizance of the Offense Under GST

When talking about offences covered by the GST structure, a crucial concept known as cognizance is in play. This legal precept governs the identification and handling of offences by the justice system. It’s important to understand that without the necessary authority, a court cannot officially acknowledge or take cognizance of any criminal violation related to GST.

A Magistrate of the First Class is the only person with the power to file a lawsuit in these situations against an individual or group accused of committing a GST offence. This highlights how crucial it is to have a specific court system that is qualified to oversee and adjudicate GST-related offences. This approach ensures that these matters are managed by a competent legal firm knowledgeable about the nuances of tax laws.

The fact that authorization is required and that a Magistrate of the First Class is involved highlights how carefully GST infractions are dealt with. This ensures that the judicial process is carried out precisely and that those accused of offences relating to the Goods and Services Tax have access to a suitable defence. The cognisance mechanism, as outlined in the GST framework, aims to maintain the balance between enforcing the law and defending individuals’ rights in cases of tax-related infractions.

Cognizable and a Non-Cognizable Offense?

In law enforcement, crimes are classified into several categories based on their seriousness and the actions required to apprehend individuals. There are significant distinctions between offences that are and are not punishable by law. Police officers can arrest for recognised offences without a warrant from a judge. To maintain public safety and justice, significant crimes such as murder, robbery, and forgery are often involved in these crimes.

However, a court-approved arrest warrant is required before the police can arrest for an offence that is not easily recognised. Defamation, forgeries, and acts of public violence are a few of these less serious offences. The distinction between offences that are and are not punishable by law is essential for the legal system to strike a balance between individual rights and community protection.

Notably, this legal context is further complicated by the arrest provisions under Section 132 of the GST Act. These regulations focus on apprehending individuals who have committed substantial or repeated tax evasion surpassing a predetermined threshold. The connection between these phrases and the concept of crimes subject to legal consequences highlights the seriousness of tax evasion in terms of economic and financial law. This contrast emphasises the legal protections even more in place to guarantee adherence to tax laws and preserve the legitimacy of the taxing system.


When someone, even an honest taxpayer, inadvertently neglects to pay Goods and Services Tax (GST) because they don’t realise the tax applies to them, it creates a significant problem for the administration of the GST. While there are appropriate consequences for such miscommunications, the possibility of having your property seized or even being arrested may seem excessive and irrational. This situation highlights the need for a more sophisticated approach that strikes a balance between upholding the law and offering a fair path for resolution, especially considering how recently the GST structure was implemented.

A more equitable and fair application of the GST system can be achieved by aiming for more clarity in the arrest provisions and seeking expert advice, such as that offered by LAW OFFICES OF KR. VIVEK TANWAR ADVOCATE & ASSOCIATES.

Adv. Khanak Sharma(D\1710\2023)

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