Supreme Court: In an appeal case arising from a goods and services tax (GST) investigation in which the respondent was summoned under Section 70, Central Goods and Services Tax Act, 2017 (CGST Act) and subsequently sought anticipatory bail which was rejected by Bombay High Court, but it nevertheless granted him 1-week’s protection from arrest upon communication of a future order under Section 69, CGST Act, the Division Bench of Dipankar Datta* and Sheel Nagu, JJ., affirmed the rejection of respondent’s application for pre-arrest bail and set aside the 1-week protection from arrest to the respondent vide para 6 of the impugned order. The Court held that:
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Once a pre-arrest bail application is dismissed as not maintainable, the court cannot grant or extend protection from arrest as interim relief; such protection is ancillary to the pending proceeding and cannot survive its dismissal.
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An order under Section 69, CGST Act authorising arrest must be communicated to the person sought to be arrested, as the order is a sine qua non for seeking anticipatory bail and enables the person to pursue available legal remedies.
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Such communication may be made electronically, in addition to the modes permitted under the Nagarik Suraksha Sanhita, 2023 (BNSS) and other permissible modes. This is facilitated by the requirement under Rule 8, Central Goods and Service Tax Rules, 2017 (CGST Rules) that a person seeking registration provide an email address and mobile number.
Also Read: Tax Officers’ Arrest Powers: Supreme Court Expounds the Law
Background
The Directorate General of GST Intelligence (DGGI), Mumbai Zonal Unit, was investigating M/s Alphaneon Techsolutions Pvt. Ltd. and its group entities for alleged wrongful availment and passing of input tax credit without actual supply of goods or services, circular invoicing, and non-payment of GST on import of services. During an inspection of the registered premises, the respondent was present and acknowledged the inspection.
During the investigation, the Department issued Respondent 3 summonses under Section 70, CGST Act. Instead of appearing pursuant to the summonses, he sought adjournments and thereafter approached the Sessions Court, Mumbai, seeking anticipatory bail. That application was rejected on 14 October 2025. He then approached the Bombay High Court for pre-arrest bail. Pursuant to the High Courts interim directions, he appeared before the Department and his statement was recorded.
Before the High Court, the Department stated by affidavit that no order under Section 69, CGST Act had yet been passed because the investigation was still at a nascent stage and the material facts were under verification. Consequently, the High Court rejected the application for anticipatory bail, observing that, in the absence of an order under Section 69, there could be no apprehension of arrest and therefore an application for anticipatory bail could not be entertained.
However, despite rejecting the application, the High Court directed that the respondent should not be arrested for 1 week from the date on which an order under Section 69, CGST Act was communicated to him.
The appellant-Union of India challenged this protective direction before the Supreme Court. Importantly, the respondent did not challenge before the Supreme Court the High Court’s rejection of his application for pre-arrest bail.
Issues for Consideration
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Whether a High Court or Sessions Court, while dismissing an application for pre-arrest bail as not maintainable, nevertheless grant protection from arrest for a specified period as an interim measure?
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Whether an order passed by the Commissioner under Section 69, CGST Act authorising arrest must be communicated to the person sought to be arrested.
Analysis
No Interim Protection After Dismissal of Pre-Arrest Bail
At the outset, the Court referred to State of Orissa v. Madan Gopal Rungta, 1951 SCC 1024, wherein under Article 226 of the Constitution, interim relief cannot be granted as an independent or final relief when the principal proceeding itself is not maintainable. The interim relief exists only in aid of, and as ancillary to, the main relief.
The same principle was applied in the criminal context in Hema Mishra v. State of U.P., (2014) 4 SCC 453. In that case, this Court had considered whether a High Court could, after dismissing a petition seeking quashing of an FIR or charge-sheet, nevertheless grant protection against arrest for a specified period or until completion of trial. The answer was no.
Applying the same principle to present case, the Court held that “while dismissing a petition seeking pre-arrest bail … the high court or the sessions court … cannot extend or grant protection which is in the nature of interim relief that could be granted during the pendency of the application”.
Thus, the Court held that High Court could not reject respondent’s anticipatory-bail application and simultaneously preserve a period of protection that operated as an interim form of anticipatory bail.
Communication of Section 69 CGST Arrest Order
The Court noted that Section 69(1), CGST Act empowers the Commissioner, where the statutory conditions are satisfied, to authorise an officer of central tax to arrest a person. The Court emphasised that the exercise of this power must be preceded by “reasons to believe”, and those reasons must refer to the underlying material and evidence and demonstrate application of mind. The Court identified these as safeguards flowing, among other things, from Radhika Agarwal v. Union of India, (2025) 6 SCC 545.
The respondent’s counsel argued that until such an order is made, there is no apprehension of arrest capable of supporting an anticipatory-bail application. However, once the Commissioner forms the requisite “reasons to believe” and passes the Section 69 order, the position changes: the person becomes liable to arrest and consequently acquires the right to seek pre-arrest bail. The Court accepted this reasoning and described the Section 69 order as a “sine qua non” for maintaining an application for anticipatory bail.
Having held that the order under Section 69, CGST Act being a “sine qua non” to seek anticipatory bail, the Court found it anomalous to hold that the order need not be communicated to the person concerned. Therefore, the Court accepted the respondent’s submission that communication of the order is mandatory. Such communication does not obstruct the investigation. Instead, it enables the person concerned to exercise the legal remedy available to him, including the right to seek anticipatory bail.
Further, the Court relied on Gurbaksh Singh Sibbia v. State of Punjab, (1980) 2 SCC 565, wherein it was held that courts should be cautious about imposing unnecessary restrictions upon the scope of anticipatory bail, since the provision concerns the personal liberty of an individual who continues to enjoy the presumption of innocence.
The Court further observed that the Section 69, CGST Act order is amenable to judicial review. Consequently, the accused must have an effective opportunity to challenge the order and the “reasons to believe” which led to its issuance. Withholding those reasons could have “drastic consequences on the right to liberty of the accused”.
The Court also noted that Rule 8, CGST Rules requires a person seeking registration to provide an email address and mobile number. Accordingly, communication of the Section 69, CGST Act order may be made electronically, in addition to the modes permitted under BNSS and other legally permissible modes of communication.
Decision
The Court:
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affirmed the rejection of respondent’s application for pre-arrest bail;
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set aside the 1-week protection from arrest to the respondent vide para 6 of the impugned order;
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directed the Commissioner to communicate the Section 69, CGST Act order to the respondent in an appropriate legally permissible manner;
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reiterated, without such communication, question of arrest would not arise;
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clarified that the respondent could thereafter pursue such remedy as may be available to him in law;
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directed that the investigation should continue uninfluenced by the observations in the judgment; and
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clarified that the observations were confined to the legal issue and did not constitute findings on the facts or merits of the case.
[Union of India v. Sunil Biyani, 2026 SCC OnLine SC 1544, decided on 12-8-2026]
*Judgment Authored by Justice Dipankar Datta
Advocates who appeared in this case:
For the Appellant: Mr. Gurmeet Singh Makker, AOR
For the Respondent: Mr. Gaurav Agarwal, Sr. Adv. Mr. Arjun Garg, AOR Ms. Arushi Kulshrestha, Adv. Mr. Saaransh Shukla, Adv. Ms. Muskan Bensla, Adv.
