Don’t use coercion during search and seizure to recover GST: SC to Centre

The law officer spoke of instances when goods are transported in oil tankers, auto-rickshaws and various methods are adopted to evade liability.

Senior advocate Kavin Gulati, appearing for one of the petitioners, said in his nearly three-decade career, he never saw as many arrests and confiscations as have happened in the past five years under the GST regime.

“Thousands of petitions are pending in different high courts. I have never seen so many pre-conviction arrests happening in my career which has happened in this GST regime. We have seen Income Tax Act and Value Added Tax regime, which was also a multi-point tax regime, but what has happened under the GST regime is shocking,” he said.

Raju intervened, contending it is not that the department is arresting every other person which is mostly done in tax fraud cases.

Gulati said in most cases, the officer threatens a person summoned under section 70 that he will be arrested if no payment is made. He said under the existing regime, the show cause notice is issued by the same officer who records the statements and conducts the adjudication proceedings.

The bench told Raju if the allegation of same officers conducting the entire proceedings is true, then there will be a possibility of bias and it will have to examine this issue.

The hearing remained inconclusive and would continue on Thursday.

On 2 May, the top court had asked the Centre to furnish details about issuance of notices and arrests done under the provisions of the GST Act saying it may interpret the law and lay down appropriate guidelines to avoid harassment of citizens by depriving them of their liberty.

It has voiced concern over the ambiguity in section 69 of the GST Act that deals with the powers of arrest. The top court had said it would interpret the law to “strengthen” the liberty, if need be, but not allow citizens to be harassed.

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