SC issues Notice to Centre on plea challenging provisions of CGST Act

The Supreme Court has issued notice to the central government on a petition challenging certain sections of the Central Goods and Service Tax (CGST) Act, 2017, that provides for 'power of arrest' any person alleged to have committed an offence under the law.

A bench headed by Justice AM Khanwilkar on Tuesday issued the notice on a petition filed by one Aditya Gupta, owner of Arav Iron and Steel Ltd, who is facing charges for evasion of Service Tax and CGST to the tune of approximately Rs 52 crores.

The petition filed by advocates Vijay Aggarwal and Mudit Jain claimed that Gupta was arrested in connection with the case and has already spent about 22 months in custody for an offence punishable with a maximum punishment of five years.

The plea submitted that the arrest of Gupta on June 20, 2018, was illegal and in violation of his fundamental rights as the investigation conducted against him was violation of the procedure established by law as contemplated under the Code of Criminal Procedure (CrPC).

Gupta, in his plea, sought for the top court to decide whether it was beyond the legislative competence of the Centre to enact such sections of arrest and criminal prosecution which are criminal in nature under the general power to levy tax.

"The Petitioner seeks to challenge the vires of Section 69 and Section 132, CGST Act, 2017, by way of this writ petition on the ground that an arrest cannot be made under the said Act, as there is no constitutional backing to the same," the plea said. 

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