Transit anticipatory bail in a GST inquiry for a non-existent firm is denied;

Transit anticipatory bail in a GST inquiry for a non-existent firm is denied; pre-arrest bail must be sought from the jurisdictional court.

Issue:

Whether transit anticipatory bail should be granted to an applicant apprehending arrest in a GST inquiry (under Sections 69 and 132 of the CGST/UPGST Act, 2017) where summons have been issued alleging the applicant is the owner of a non-existent firm, especially when such bail is only granted in exceptional circumstances.

Facts:

• Summons were issued to the petitioner, alleging that the petitioner was the owner of a non-existent firm.
• Based on these summons, the petitioner was summoned for a GST inquiry.
• The applicant sought transit anticipatory bail, apprehending arrest in the wake of the summons.
• The applicant submitted that their proprietorship firm was alleged to be non-existent, and they were being summoned for an inquiry.

Decision:

The court held in favor of the revenue, dismissing the application for grant of transit anticipatory bail. It ruled that the concession of transit anticipatory bail is granted only in exceptional circumstances where its denial may result in prejudice to the accused-applicant. It emphasized that transit anticipatory bail cannot be granted in a routine manner and that pre-arrest bail should be sought before the court where jurisdiction lies.

Key Takeaways:

• Transit Anticipatory Bail – Exceptional Circumstances Only: Transit anticipatory bail is a very limited relief. It is typically granted by a High Court or Sessions Court when a person apprehends arrest in a different state/jurisdiction and needs temporary protection to approach the court of competent jurisdiction where the FIR/offense is registered. It is not granted as a routine matter.
• Jurisdictional Court for Pre-Arrest Bail: The proper forum for seeking anticipatory bail (pre-arrest bail) is the High Court or Sessions Court having territorial jurisdiction over the place where the offense is alleged to have occurred or where the FIR is registered.
• GST Inquiry & Summons: The issuance of summons for a GST inquiry (under Section 70 of the CGST Act) is a part of the investigative process. While it may precede an arrest under Section 69, seeking transit anticipatory bail solely on the basis of a summons, without demonstrating exceptional circumstances or immediate threat of prejudicial arrest outside jurisdiction, is generally not entertained.
• Apprehension of Arrest: While apprehension of arrest is a prerequisite for anticipatory bail, simply being summoned for an inquiry does not automatically create such an “exceptional circumstance” for transit bail. The threat must be imminent and from a different jurisdiction.
• Sections 69 and 132 CGST Act: These sections empower GST authorities to arrest individuals for certain serious offenses, including those involving fraudulent ITC. However, the arrest must be justified and follow due process.
• Section 482 of BNSS (erstwhile CrPC): This section deals with the inherent powers of the High Court to pass orders to prevent abuse of the process of any court or otherwise to secure the ends of justice. However, these inherent powers are also to be exercised sparingly and only in exceptional cases.
• In favour of revenue: The dismissal of the application means the revenue is free to proceed with its inquiry, and the applicant must seek regular anticipatory bail in the appropriate jurisdictional court if they genuinely apprehend arrest there.