Sec 69 – Power to arrest

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Sec 69 – Power to arrest 2017-04-14T10:58:01+00:00
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  • Ashish BadalaCA Ashish Badala
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    (1) Where the Commissioner has reasons to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer of central tax to arrest such person.
    (2) Where a person is arrested under sub-section (1) for an offence specified under sub- section (5) of section 132, the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty-four hours.
    (3) Subject to the provisions of the Code of Criminal Procedure, 1973,–
    (a) where a person is arrested under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate;
    (b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station.

    Priya MadrechaPriya Madrecha
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    69.1. Introduction
    This section deals with power of arrest when one commits any of the following offences which is punishable under clause (i) or (ii) of sub-section (1), or under sub-section (2) of sec 132 of CGST Act.
    (a)    Supplies any goods or services or both without issue of invoice with the intention to evade tax
    (b)    Issues any invoice or bill without supplies leading to wrongful availment or utilisation of input tax credit or refund of tax
    (c)    Avails input tax credit using invoice or bill referred to in b) above
    (d)    Collects any amount as tax but fails to pay the same beyond the period of 3 months from the due date
    69.2.  Analysis
    The Commissioner is vested with the power to authorise, by an order, any Officer to arrest a person, where there is a reason to believe that such person has committed the specified offences.
    The person committing any offence under clauses (a) or (b) or (c) or (d) u/s 132(1) cited supra and punishable under Section 132(1)(i) or 132(1)(ii) or 132(2) can be arrested by the authorised officer.
    Section 132(1) clause (i) tax evasion above Rs 500 Lakhs attracting imprisonment for a term upto 5 years and fine, or clause (ii) tax evasion above Rs 200 Lakhs attracting imprisonment upto 3 years and fine or offence or section 132(2) [repeated offence – second and subsequent offence attracting imprisonment upto 5 years with fine]
    Such person is required to be informed about the grounds of arrest and be produced before the Magistrate within 24 hours in case of cognizable offences and in case of non-cognizable and bailable offences the Assistant/Deputy Commissioner can grant the bail and is conferred powers of an officer-in-charge of a police station subject to the provisions of Code Of Criminal Procedure, 1973.
    All arrests should be made as per the provisions of Code of Criminal Procedure, 1973.
    69.3. Comparative review
    Similar power of arrest of tax evaders by officer is present in most of the indirect tax legislations.
    However under the Finance Act, 1994 the power to arrest can be exercised only in cases where taxes collected and not deposited for an amount exceeding Rs. 200 lakhs.
    69.4. Gist of Related provisions of Section 132 for ready reference for which person can be arrested
    Section     Description
    132(1)(a)     Whoever supplies any goods or services or both without issue of invoice with the intention to evade tax
    132(1)(b)     Whoever issues any invoice or bill without supplies leading to wrongful availment or utilisation of input tax credit or refund of tax
    132(1)(c)     whoever avails input tax credit using invoice or bill referred to in b) above
    132(1)(d)     whoever collects any amount as tax but fails to pay the same beyond the period of 3 months from the due date
    132(1)(i)     Prosecution where tax evaded exceeds Rs 500 lakhs. Imprisonment upto 5 years with fine
    132(1)(ii)     Prosecution where tax evaded exceeds Rs 200 lakhs. Imprisonment upto 3 years with fine
    132(2)     Second or subsequent offence. Imprisonment upto 5 years with fine
    69.5.  FAQs
    Q1.     Power of arrest could be exercised by whom?
    Ans.  The Commissioner can authorise (by an order) any officer to arrest a person, who has committed specified offences. The Commissioner should have reason to believe that such person has committed the specified offences.
    Q2.     Who can be arrested?
    Ans.  The person committing an offence (tax evasion) as specified in –
    Section 132(1) clause (i) tax evasion above Rs 500 Lakhs attracting imprisonment for a term upto 5 years and fine, or clause (ii) tax evasion above Rs 200 Lakhs attracting imprisonment upto 3 years and fine or offence or section 132(2) [repeated offence – second and subsequent offence attracting imprisonment upto 5 years with fine] can be arrested by authorised officer.
    Q3.     What is the procedure to be followed for arrest?
    Ans. (i)  The person arrested should be informed about the grounds of arrest and be produced before the Magistrate within 24 hours in case of cognizable offences
    (ii)    In case of non-cognizable and bailable offences the Assistant/Deputy Commissioner can grant the bail and is conferred powers of an officer-in-charge of a police station subject to the provisions of Code of Criminal Procedure, 1973.
    (iii)    All arrests should be made as per the provisions of Code of Criminal Procedure, 1973.
    69.6.  MCQs
    Q1.     All arrests should be made as per the provisions of ___________
    (a)    Code of Criminal Procedure, 1973
    (b)    Civil Procedure Code
    (c)    Foreign Exchange Management Act
    (d)    Indian Penal Code
    Ans.  (a) CRPC

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