Punjab & Haryana HC Raps GST Authorities for Arrest Amid Ongoing Case

Punjab & Haryana HC Raps GST Authorities for Arrest Amid Ongoing Case

The Punjab and Haryana High Court has directed the immediate release of Kuldeep Goyal, a trader arrested by Central GST authorities in Ludhiana, and strongly criticized the department for manipulating records and ignoring ongoing judicial proceedings. The order was delivered on September 25 by a Bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor in Kuldeep Goyal v Union of India and Others.

The Court found that GST officers arrested Goyal despite his pending application before a judicial magistrate seeking relief. The Bench noted inconsistencies in case records and held that the arrest appeared retaliatory and in disregard of principles of fair investigation. It emphasized that enforcement actions must not prejudice ongoing court processes.

Arrests made while matters are sub judice, without regard to fairness and transparency, erode public confidence in the administration of justice.

Section 69 of the CGST Act, 2017 permits arrest in tax evasion cases, but the Court reiterated that such power must be exercised sparingly and in compliance with procedural safeguards under Section 41 of the IPC (corresponding to Section 100 BNSS) and judicial precedents in D.K. Basu v. State of West Bengal. The Court has ordered a review of the investigation’s legality.

The ruling serves as a timely reminder to GST authorities to adhere to procedural fairness, especially when parallel judicial proceedings exist. Practitioners should cite this case to challenge mala fide arrests and seek protection under Article 21 of the Constitution.