[Cites 23, Cited by 0]
Bombay High Court
Kanhaiya Nilambar Jha vs Union Of India And Others on 5 February, 2026
2026:BHC-AUG:5423-DB
(1)
Cri.WP-885.2025.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CRIMINAL WRIT PETITION NO. 885 OF 2025
Kanhaiya Nilambar Jha
Age : 38 yrs, occ : service
R/o 5, Mohammad Chawal,
Golibar Road, Shanti Nagar,
Ghatkopar West, Mumbai Petitioner
Versus
1. Union of India
Through Secretary,
Department of Revenue,
Ministry of Finance, North
Block, New Delhi.
2. Principal Commissioner
Mr. Pradip Gurumurthy,
CGST & Central Excise,
Chhatrapati Sambhajinagar
3. Additional Commissioner
(Preventive) Mr. Rajkumar Kendre,
CGST & Central Excise,
Chhatrapati Sambhajinagar
4. The Superintendent (Preventive)
Mr. B.S. Nade, CGST & Central Excise,
Chhatrapati Sambhajinagar
5. State of Maharashtra,
Through Secretary, Government
of Law and Judiciary Dept.
Mantralaya, Mumabi Respondents
...
Mr. R.F. Totala, i/b Mr. Vedant Kabra,
Advocate for the petitioner.
Mr. A.G. Talhar, DSGI a/w Mr. Pratik Bothari and Ms. Nandini
Chittal, Advocates for respondent Nos.1 to 4.
Mr. S.R. Wakale, A.G.P. for respondent No.5-State.
...
(2)
Cri.WP-885.2025.odt
CORAM : SANDIPKUMAR C. MORE AND
Y.G. KHOBRAGADE, JJ.
Reserved On : 19.12.2025
Pronounced on : 05.02.2026
Judgment (Per Sandipkumar C. More, J.) :
1. Rule. Rule made returnable forthwith. Heard
finally with consent of the learned counsel for the petitioner as
well as learned A.P.P.
2. By way of this writ petition, the petitioner Kanhaiya
Nilambar Jha, who is posing himself as an Office Boy in M/s
Kabsan Services Private Limited, is seeking declaration about
his arrest by present respondent No.4 in Case No.1/2025, as
null and void. He has also prayed for quashing and setting
aside the order dated 21.06.2025 passed by the learned
Judicial Magistrate (First Class), Nanded granting his
magisterial custody. Consequently, the petitioner has sought
direction to respondent No.4 to give him compensation of Rs.
10,00,000/- (Rupees Ten Lakh) towards his illegal arrest.
3. Chronology of the events and background facts as
claimed by the petitioner,can be summarised as under :
On 17.06.2025 around 1.00 p.m. GST Officers
visited office of one Chartered Accountant Bhavik Bhanushali
(Mehta) at Mumbai. Thereafter the petitioner was
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telephonically called there and taken into custody by these
GST Officers without any summons or arrest memo on the
same day. Thereafter he was taken out of Mumbai to
Chhatrapati Sambhajinagar without informing his family
members. On 18.06.2025 the petitioner was brought and
illegally detained at CGST and Central Excise Office, GST
Bhavan, Chhatrapati Sambhajinagar. He was kept there in the
custody without showing any arrest and without producing
him before any Magistrate till 20.06.2025. On 20.06.2025 wife
of the petitioner approached an Advocate who visited CGST
Office and met the petitioner there. According to respondent
No.4, petitioner was called since 17.06.2025 for recording his
statement as witness. Therefore, advocate of the petitioner e-
mailed multiple senior GST officers seeking information
regarding basis of custody of petitioner and his expected
release. But respondent No.4, in turn, issued threatening
reply e-mail by refusing to provide any information. Advocate
for the petitioner again sent e-mail reiterating illegality of his
detention. However, on 21.06.2025, respondent No.4 shown
formal arrest of the petitioner at Nanded under Section 69 of
the Central Goods and Services Tax Act (for short, "CGST Act")
and filed Case No. 1/2025 before the learned Judicial
Magistrate (First Class), Nanded for the offence punishable
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under Sections 132 (1)(b), 132 (1)(c) and 132 (I)(i) of the CGST
Act. On 21.06.2025 the concerned Magistrate remanded the
petitioner in M.C.R. till 03.07.2025. The petitioner, on the
same day, filed bail application before concerned Magistrate
citing his illegal detention since 17.06.2025. However, after
filing say opposing the said bail application, the same was
rejected by the concerned Magistrate on 23.06.2025. Then on
26.06.2025, petitioner filed fresh bail application before the
Sessions Judge, Nanded and subsequently filed application for
interim bail on 03.07.2025. Though the learned Sessions
Judge allowed application of interim bail on 04.07.2025, but
the respondents Authorities immediately filed application for
cancellation of said bail application on 05.07.2025, and
therefore, the concerned learned Sessions Judge granted stay
to the interim bail. However, this Court then directed to decide
the bail application of the petitioner, and therefore, the learned
Sessions Judge, Nanded, after hearing both the parties, was
pleased to grant bail to the petitioner. As such, the petitioner
is now claiming the aforesaid reliefs on the ground of his
alleged illegal detention.
4. Learned counsel for the petitioner, during the
course of argument, did not press the prayers mentioned in
prayer clauses (b) and (c) in the petition so far as it relate to
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declaring arrest of the petitioner as null and void and order of
granting him magisterial custody. As such, the only prayer
remains in this petition is in respect of grant of compensation
of Rs. 10,00,000/- on account of alleged illegal arrest of the
petitioner. Learned counsel for the petitioner vehemently
argued that respondent No.4 Mr. Nade was not having
jurisdiction to issue summons to the petitioner at Mumbai and
the summons to the petitioner issued on 17.06.2025 was
therefore without jurisdiction and prepared as false and
fabricated document. According to him, CA Bhavik was called
at 9.00 p.m. on 17.06.2025 at the office of Ankit Dharod
without any summons and concocted story was prepared for
facilitating illegal detention of the petitioner. Learned counsel
for the petitioner submits that fabricated record of summons
was prepared after the petitioner was taken into custody and
that too after getting mail from his advocate. Learned counsel
for the petitioner further submitted that in fact 7 days notice
was required for issuing summons as per order XVI of the
Code of Civil Procedure since there is no specific provision
about the duration mentioned in Section 70 of the CGST Act.
According to him, there was violation of guidelines issued by
higher authorities of the respondents and Article 21 (2) and
Article 22 of the Constitution of India as well. Thus, the
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learned counsel for the petitioner claimed that there was illegal
detention of the petitioner at the hands of respondents for
which heavy compensation needs to be awarded. In support of
his submissions, he also relied on the following judgments.
(i) Joginder Kumar vs State of U.P. and others
(1994) 4 SCC 260
(ii) D.K. Basu vs State of W.B.; (1997) 1 SCC 416
(iii) Dikshant vs State of Maharashtra;
2025 SCC OnLine Bom 3484
(iv) FSM Education Pvt. Ltd vs Union of India and others
(2022) 2 Mah LJ 128
5. On the contrary, learned counsel Mr. Talhar for
respondent Nos.1 to 3, by filing affidavit-in-reply, strongly
opposed the submissions made on behalf of the petitioner. He,
by referring chronology of the events, contended that the
petitioner was in fact managing the affaris of M/s Kabsan
Services Pvt. Ltd and by showing fake and fabricated accounts,
he secured input tax credit of huge amount in crores.
According to him, petitioner was in fact called as a witness to
record his statements under proper summons under Section
70 of the CGST Act, which does not say anything about 7 days
notice in advance. According to him, from 17.06.2025 to
20.06.2025, the petitioner was with the respondents
voluntarily and under proper summons for recording
statement and only on 21.06.2025, after ascertaining the
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charges against the petitioner, he was arrested at Nanded and
produced before the Magistrate on the same day. As such,
according to learned counsel for respondent Nos.1 to 3, there
was no restriction on the petitioner till 20.06.2025 and only
after disclosing the grounds of arrest, he was taken in custody
on 21.06.2025. He pointed out that proper procedure was
followed while giving summons to the petitioner as well as CA
Bhavik Mehta. According to him, there was no need of 7 days
notice as claimed by the petitioner. Thus, he prayed for
dismissal of the petition. He also relied on the following
judgments.
(i) Ram Kotumal Issrani vs Directorate of Enforcement
and others; 2024 ALLMR (Cri) 1881
(ii) Radhika Agarwal vs Union of India (UOI) and others
MANU/SC/0274/2025
6. Learned counsel for the petitioner, vide affidavit in
rejoinder, reiterated his contention in the petition.
7. With the able assistance of the learned counsel for
the petitioner as well as learned Counsel Mr. Talhar, we have
gone through the documents placed on record and also the
material placed on record in the light of observations of the
citations relied by the rival parties and the concerned legal
provisions.
Cri.WP-885.2025.odt
8. As observed earlier, it is to be noted that now only
one prayer in this petition is remained for consideration, since
the learned counsel for the petitioner waived prayer clauses (B)
and © for declaring the arrest of the petitioner as well as order
of granting him magisterial custody, as null and void. The
petitioner is now claiming compensation of Rs. 10,00,000/- for
his illegal detention at the hands of the respondents by
alleging that he was taken in custody from 17.06.2025 to
20.06.2025, but his arrest was shown on 21.06.2025. On the
contrary, respondent Nos.1 to 4 are claiming that the
petitioner was not in fact arrested, but to ascertain the
fraudulent utilization of Input Tax Credit by the Kapson
Company registered at Nanded of which the petitioner was
found to be In-charge of, they had summoned the petitioner as
well as other persons namely Chartered Accountant Ankit
Dharod and his consultant Bhavik Mehta for recording their
statements. In short, they claimed that the petitioner
suppressed the fact that he was accompanied by the aforesaid
persons during the period from 17.06.2025 to 20.06.2025 and
came with a false case of his illegal detention. Under such
circumstances, the only question which is under consideration
in the petition is, as to whether the petitioner was under illegal
detention for the aforesaid period when he was summoned for
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recording statement under Section 70 of the CGST Act.
Learned counsel for the petitioner also raised question that
there was violation of Section 70 as respondent Nos.1 to 4 did
not give 7 days notice for the petitioner to appear before them
under the aforesaid summons.
9. Admittedly, the chronology of the events as
observed by us in the upper part, is not in dispute and only in
the light of legal provision, it can be decided as to whether the
period from 17.06.2025 to 20.06.2025 spent by the petitioner
with respondent Nos.1 to 4 amounts to illegal detention.
10. Admittedly, from the record it is disclosed that
when Anti-evasion Wing of CGST, Aurangabad generated a
system generated intelligence indicating fraudulent utilization
of ITC (Input Tax Credit) by Kabsan and passing on of GST
without any supply of goods or services or both, an inquiry
was commenced. In that connection respondent No.4 visited
the office of Bhavik Mehta at Mukbai where the petitioner was
called. After having found involvement of the petitioner,
seizure of 42 mobile phones, 12 SIM cards, one all-in-one
computer, two laptops and two CPU were seized from him.
Thereafter it appears that on 17.06.2025 when all this
procedure took time, the petitioner was asked under summons
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as per Section 70 of the CGST Actto appear before respondent
No.2 for further questioning at Aurangabad. The record shows
that other persons Bhavik Mehta and Ankit Dharod were also
issued with similar summonses for their appearance on
18.06.2025 at about 11.30 a.m. at GST Bhavan, Aurangabad.
On going through the copies of the said summonses, it is
clearly evident that they are received by the petitioner as well
as these two persons without raising any objection by
acknowledging them under their respective signatures.
Further, after attending GST Bhavan at Aurangabad, the
petitioner and Bhavik Mehta were again issued with similar
summonses for attending GST Bhavan on 19.06.2025 for
further inquiry. Thereafter on 19.06.2025 also the petitioner
was called for inquiry on 20.06.2025. It is to be noted that the
petitioner did not raise any objection for such attendance
during period from 17.06.2025 to 20.06.2025. Thereafter on
ascertaining the involvement of the petitioner he was arrested
on 21.06.2025 and without any delay, produced concerned
Magistrate, who granted him custody.
11. Learned counsel for the petitioner vehemently
argued that there should have been 7 days notice prior to
fixing the date for inquiry in view of Section 70 of CGST Act,
but there was clear-cut violation at the hands of respondent
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No.4 while issuing said summons by not giving time gap of 7
days. For that purpose he drew our attention to the concerned
Section 70 of CGST Act, which reads thus :
"(1) The proper officer under this Act shall have
power to summon any person whose attendance he
considers necessary either to give evidence or to
produce a document or any other thing in any
inquiry in the same manner, as provided in the case
of a civil court under the provisions of the Code of
Civil Procedure, 1908 (5 of 1908).
(1-A) All persons summoned under sub-section (1)
shall be bound to attend, either in person or by an
authorised representative, as such officer may direct,
and the person so appearing shall state the truth
during examination or make statements or produce
such documents and other things as may be
required.]
(2) Every such inquiry referred to in sub-section (1)
shall be deemed to be a "judicial proceedings" within
the meaning of section 193 and section 228 of the
Indian Penal Code (45 of 1860)".
Admittedly, on going through Section 70, it has
been provided that the summons must be issued as provided
in the case of Civil Court under the provisions of the Code of
Civil Procedure, 1908 (5 of 1908). However, nowhere in this
Section there is reference of 7 days prior notice. Learned
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counsel for the petitioner, for that purpose, relied on Order XVI
of the C.P.C. which relates to summoning and attendance of
witnesses, which is reproduced herein below for quick
reference.
"(1) On or before such date as the Court may appoint,
and not later than fifteen days after the date on which
the issues are settled, the parties shall present in
Court a list of witnesses whom they propose to call
either to give evidence or to produce documents and
obtain summonses to such person for their attendance
in Court.
(2) A party desirous of obtaining any summons for the
attendance of any person shall file in Court an
application stating therein the purpose for which the
witness is proposed to be summoned.
(3) The Court may, for reasons to be recorded, permit a
party to call, whether by summoning through Court or
otherwise, any witness, other than those whose names
appear in the list referred to in sub-rule (1), if such part
shows sufficient cause for the omission to mention the
name of such witness in the said list.
(4) Subject to the provisions of sub-rule (2), summonses
referred to in this rule may be obtained by the parties
on an application to the Court or to such officer as may
be appointed by the 2[Court in this behalf within five
days of presenting the list of witnesses under sub-rule
(1).]".
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However, on going through the aforesaid Order, it
indicates that it is in respect of summons to the witnesses
after settlement of issues, that means, at the stage of trial.
But in the instant matter, after considering the language of
Section 70 of the CGST Act, summons has been issued to the
petitioner in respect of inquiry, and therefore, when the
Section is silent in respect of 7 days notice, we are unable to
understand that there should be 7 days notice required for
such inquiry.
12. Though in the case of FSM Education Pvt. Ltd vs
Union of India (supra) this Court had held that if any
summons is required to be issued by the respondent, then it
shall indicate the purpose of issuance of summoned with clear
7 days notice, however, this observation had come in the
peculiar circumstances of that case only and this cannot be
made directly applicable in the instant matter, considering the
mandate of Section 70 of CGST Act. It is to be noted that in
the case of Radhika Agarwal vs Union of India (supra), the
Hon'ble Apex Court has held thus:
"69. However, we may clarify that a person
summoned under Section 70 of the GST Acts is not
per se an accused protected under Article 20(3) of
the Constitution, as has been held in the case of
Deepak Mahajan (supra). This is because the
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prohibitive sweep of Article 20(3) of the
Constitution does not go back to the stage of
interrogation. Reference in this regard has been
placed on Poolpandi and Others v. Superintendent,
Central Excise and Others53 and Dukhishyam
Benupani, Asst. Director, Enforcement Directorate
(FERA) v. Arun Kumar Bajoria.54 It is obvious that
the investigation must be allowed to proceed in
accordance with law and there should not be any
attempt to dictate the investigator and at the same
time, there should not be any misuse of power and
authority.
72. The last issue for our determination concerns
the constitutional validity of Sections 69 and 70 of
the GST Acts which provide for the power to arrest
and the power to summon. The petitioners assail
the vires of these provisions on the grounds of
legislative competence. It is submitted that Article
246-A of the Constitution while conferring
legislative powers on Parliament and State
Legislatures to levy and collect GST, does not
explicitly authorize the violations thereof to be
made criminal offences. Our attention was drawn
to Lists I and II of the Seventh Schedule to the
Constitution which demarcate the legislative fields
for the Union and the States to enact laws and
make violations of the enactments as offences.
Referring to Entry 93 of List I to the Seventh
Schedule, it is submitted that the Parliament can
enact criminal provisions only for the matters in
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List I. It is further submitted that the power to
summon, arrest and prosecute are not ancillary
and incidental to the power of levying GST and
therefore, are beyond the legislative competence of
the Parliament under Article 246-A of the
Constitution.
73. This argument, in our opinion, must be
rejected. Article 246-A of the Constitution is a
special provision defining the source of power and
the field of legislation for the Parliament and the
State Legislature with respect to GST:
"246-A. Special provisions with respect to
goods and services tax.--(1)
Notwithstanding anything contained in
Articles 246 and 254, Parliament, and,
subject to clause (2), the legislature of
every State, have power to make laws
with respect to goods and services tax
imposed by the Union or by such State.
(2) Parliament has exclusive power to
make laws with respect to goods and
services tax where the supply of goods, or
of services, or both takes place in the
course of inter-State trade or commerce.
Explanation.--The provisions of this
article, shall, in respect of goods and
services tax referred to in clause (5) of
Article 279-A, take effect from the date
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recommended by the Goods and Services
Tax Council."
75. The Parliament, under Article 246-A of the
Constitution, has the power to make laws
regarding GST and, as a necessary corollary,
enact provisions against tax evasion. Article 246-A
of the Constitution is a comprehensive provision
and the doctrine of pith and substance applies.
The impugned provisions lay down the power to
summon and arrest, powers necessary for the
effective levy and collection of GST. Time and
again this Court has held that while deciding the
issue of legislative competence, entries should not
be read in a narrow or pedantic sense but given
their broadest meaning and the widest amplitude
because they are intrinsic to a machinery of
government.58 The ambit of an entry or article
laying down the legislative field extends to all
ancillary and subsidiary matters which fairly and
reasonably can be said to be comprehended in
it.59 This settled dictum regarding the
interpretation of legislative entries equally applies
to the special provision of Article 246-A of the
Constitution. In the context of the legislative power
to levy and collect tax, a Constitution Bench of
Seven Judges in R.S. Joshi, Sales Tax Officer,
Gujarat and Others v. Ajit Mills Limited and
Another,60 held:
"47. The principle in construing words
conferring legislative power is that the most
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liberal construction should be put on the
words so that they may have effect in their
widest amplitude. None of the items in the
List is to be read in a narrow restricted
sense. Each general word should be held to
extend to all ancillary or subsidiary matters
which can fairly and reasonably be said to
be comprehended in it. All powers necessary
for the levy and collection of the tax
concerned and for seeing that the tax is not
evaded are comprised within the legislative
ambit of the Entry as ancillary or incidental.
It is also permissible to levy penalties for
attempted evasion of taxes or default in the
payment of taxes properly levied."
Thus, a penalty or prosecution mechanism
for the levy and collection of GST, and for
checking its evasion, is a permissible
exercise of legislative power. The GST Acts,
in pith and substance, pertain to Article 246-
A of the Constitution and the powers to
summon, arrest and prosecute are ancillary
and incidental to the power to levy and
collect goods and services tax. In view of the
aforesaid, the vires challenge to Sections 69
and 70 of the GST Acts must fail and is
accordingly rejected.
82. Whenever the jurisdiction of the High Court
or the Supreme Court is invoked under Article 226
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or Article 32 as the case may be, challenging the
punitive or preventive detention, the Court is
expected to take into consideration the nature of
right infringed, the scope and object of the
legislation under which such arrest or detention is
made, the need to balance the rights and interests
of the individual as against those of the society,
the circumstances under which and the persons by
whom the jurisdiction is invoked etc. In exercise of
their discretionary jurisdiction, the High Courts
and the Supreme Court do not, as courts of appeal
or revision, correct errors of law or of facts. The
judicial intervention is warranted only in
exceptional circumstances when the arrest is
prima facie found to be malafide; or is prompted
by extraneous circumstances, or is made in
contravention of or in breach of provisions of the
concerned statute; or when the authority acting
under the concerned statute does not have the
requisite authority etc.
87. However, when the legality of such an arrest
made under the Special Acts like PMLA, UAPA,
Foreign Exchange, Customs Act, GST Acts, etc. is
challenged, the Court should be extremely loath in
exercising its power of judicial review. In such
cases, the exercise of the power should be
confined only to see whether the statutory and
constitutional safeguards are properly complied
with or not, namely to ascertain whether the officer
was an authorized officer under the Act, whether
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the reason to believe that the person was guilty of
the offence under the Act, was based on the
"material" in possession of the authorized officer
or not, and whether the arrestee was informed
about the grounds of arrest as soon as may be
after the arrest was made. Sufficiency or
adequacy of material on the basis of which the
belief is formed by the officer, or the correctness of
the facts on the basis of which such belief is
formed to arrest the person, could not be a matter
of judicial review".
13. Therefore, on going through the aforesaid
observations as well as language of Section 70 of CGST Act, it
cannot be held that there was need of 7 days notice for issuing
summons under Section 70 of the CGST Act. On the contrary,
it has to be held that a person can be summoned for making
inquiry and recording his statement under the said provision
which does not amount to detention.
14. In the instant case, it appears that the petitioner
had readily accepted the summons issued to him from
17.06.2025 to 19.06.2025. He readily acknowledged the
summons by putting his signatures thereon and also attending
on the dates. Further, during that period he did not make any
complaint about his alleged illegal detention. Further, the
record shows that he was kept in GST Bhavan at Aurangabad
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as per his own wish and he was also allowed to use his four
mobile handsets from which he could have easily made contact
with his family members. Under such circumstances, by no
stretch of imagination, it can be held that the petitioner was
under illegal detention at the hands of respondent Nos.1 to 4
during the said period. Therefore, no question arises of
awarding compensation to the petitioner, as claimed by him.
With these observation, we find no substance in the present
petition and accordingly it stands dismissed.
15. Rule is discharged.
(Y.G. KHOBRAGADE) (SANDIPKUMAR C. MORE)
JUDGE JUDGE
VD_Dhirde
