The Supreme Court has issued a Notice in petitions challenging the constitutional validity of summoning and arrest powers of the officials under the Central Goods and Services Tax Act, 2017 (CGST Act).
Two writ petitions have called into question, several provisions, including Section 69 (power to arrest), 70(1) (power to summon persons to give evidence and produce documents) of the CGST Act.
A division bench of Justice Sanjay Kishan Kaul and Justice Sudhanshu Dhulia has further stayed any coercive action against the petitioners.
The petitioner has argued that Sections 69 and 70 of the CGST Act are unconstitutional as being provisions of a criminal nature; they could not have been enacted under Article 246A of the Constitution of India, 1950. The power to arrest and prosecute is not ancillary and/or incidental to the power to levy and collect goods and services tax.
It has been submitted that Entry 93 of List 1 of the Seventh Schedule of the Constitution of India confers jurisdiction upon the Parliament to make criminal laws only concerning matters in List 1, not CGST, and therefore, Sections 69 and 70 of the CGST Act are beyond the legislative competence of the Parliament.
It has thus been contended that despite the CGST officers being vested with the powers of police officers and those of a civil court while investigating an offence, the proceedings are still termed as an 'inquiry,' and the person summoned is not termed as an ‘accused’. Since, the said officers are not police officers, and no protection under Article 20(3) of the Indian Constitution is available to the summoned persons, it is thus immensely prejudiced to the Petitioners/ person under inquiry.
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