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What is the story about?
The Supreme Court on Wednesday, August 12, set aside a Bombay High Court order that had granted interim protection from arrest to Future Group non-executive director Sunil Biyani in connection with a Goods and Services Tax (GST) investigation.
A Bench of Justices Dipankar Datta and Sheel Nagu held that the manner in which the Bombay High Court had granted protection from arrest was impermissible in law.
The case relates to summons issued by the Directorate General of GST Intelligence (DGGI) to Biyani in connection with an investigation into alleged fake invoicing and circular input tax credit transactions. The probe involves a GST implication of over ₹200 crore, according to Bar & Bench.
In February, the Bombay High Court had held that Biyani's anticipatory bail plea was premature as the GST authorities had not passed any arrest order under Section 69 of the Central Goods and Services Tax (CGST) Act.
However, the High Court had directed that if the GST authorities subsequently issued an arrest order, it would not be implemented for a week from the date Biyani was informed of the order.
The Central government challenged this direction before the Supreme Court, questioning whether a High Court could grant interim protection from arrest after holding that an anticipatory bail plea was premature and not maintainable.
The Supreme Court has now set aside the portion of the High Court order granting the one-week protection.
“We have set aside the direction contained in para 6 (giving interim protection for a week from the date on which any future arrest order may be passed), saying that it is not permissible in law,” the Bench said, as reported by Bar & Bench.
GST arrest order must be communicated
At the same time, the Supreme Court directed that any arrest order issued under Section 69 of the CGST Act must be communicated to the person concerned.
The Court said this would ensure that a person facing an apprehension of arrest is not placed in a position of irreparable harm and has an opportunity to pursue the legal remedies available.
The Bench noted that GST dealers are required to provide an email address under the relevant rules, allowing such orders to be communicated electronically.
The matter was subsequently disposed of on these terms.
GST investigation against Biyani
The DGGI's investigation concerns allegations of fake invoicing and circular input tax credit. According to the agency, the transactions under investigation involved invoices and input tax credit that allegedly did not correspond to genuine business activity.
The probe also covers foreign remittances of around ₹1,208.77 crore, on which GST of about ₹217.57 crore was allegedly payable, along with around ₹50 crore in allegedly ineligible input tax credit, Bar & Bench reported.
Biyani has denied involvement in the alleged fraud. His plea before the Bombay High Court stated that he had resigned from the relevant company in July 2023 and alleged that he had been implicated through fraudulent company filings. He had also maintained that he was willing to cooperate with the investigation.
Also Read: Food safety lapses: After Zepto, Zomato's Bengaluru warehouse inspected; action against Blinkit's Mumbai outlet
A Bench of Justices Dipankar Datta and Sheel Nagu held that the manner in which the Bombay High Court had granted protection from arrest was impermissible in law.
The case relates to summons issued by the Directorate General of GST Intelligence (DGGI) to Biyani in connection with an investigation into alleged fake invoicing and circular input tax credit transactions. The probe involves a GST implication of over ₹200 crore, according to Bar & Bench.
In February, the Bombay High Court had held that Biyani's anticipatory bail plea was premature as the GST authorities had not passed any arrest order under Section 69 of the Central Goods and Services Tax (CGST) Act.
However, the High Court had directed that if the GST authorities subsequently issued an arrest order, it would not be implemented for a week from the date Biyani was informed of the order.
The Central government challenged this direction before the Supreme Court, questioning whether a High Court could grant interim protection from arrest after holding that an anticipatory bail plea was premature and not maintainable.
The Supreme Court has now set aside the portion of the High Court order granting the one-week protection.
“We have set aside the direction contained in para 6 (giving interim protection for a week from the date on which any future arrest order may be passed), saying that it is not permissible in law,” the Bench said, as reported by Bar & Bench.
GST arrest order must be communicated
At the same time, the Supreme Court directed that any arrest order issued under Section 69 of the CGST Act must be communicated to the person concerned.
The Court said this would ensure that a person facing an apprehension of arrest is not placed in a position of irreparable harm and has an opportunity to pursue the legal remedies available.
The Bench noted that GST dealers are required to provide an email address under the relevant rules, allowing such orders to be communicated electronically.
The matter was subsequently disposed of on these terms.
GST investigation against Biyani
The DGGI's investigation concerns allegations of fake invoicing and circular input tax credit. According to the agency, the transactions under investigation involved invoices and input tax credit that allegedly did not correspond to genuine business activity.
The probe also covers foreign remittances of around ₹1,208.77 crore, on which GST of about ₹217.57 crore was allegedly payable, along with around ₹50 crore in allegedly ineligible input tax credit, Bar & Bench reported.
Biyani has denied involvement in the alleged fraud. His plea before the Bombay High Court stated that he had resigned from the relevant company in July 2023 and alleged that he had been implicated through fraudulent company filings. He had also maintained that he was willing to cooperate with the investigation.
Also Read: Food safety lapses: After Zepto, Zomato's Bengaluru warehouse inspected; action against Blinkit's Mumbai outlet
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