Union Of INDIA vs. Sunil Biyani

Held

The Supreme Court held that the High Court erred in granting protection from arrest for a week after rejecting the pre-arrest bail application. It is a settled position that no interim relief can be granted when a petition for pre-arrest bail is dismissed. The Court clarified that an order under Section 69 of the CGST Act is a sine qua non for seeking anticipatory bail, and therefore, it must be communicated to the person sought to be arrested. This communication is essential to enable the accused to pursue remedies available under the law, such as applying for anticipatory bail or challenging the order. Rule 8 of the CGST Rules, mandating the provision of email and mobile numbers for registration, supports communication through electronic means. Thus, the Commissioner is required to communicate the Section 69 order to the respondent, after which he may pursue his remedies. Without such communication, arrest would not arise. The protective order granted by the High Court was set aside.

Facts

The Directorate General of GST Intelligence (DGGI) was investigating M/s Alphaneon Techsolutions Pvt. Ltd. and its group entities for alleged wrongful availment and passing of Input Tax Credit (ITC), circular invoicing, and non-payment of GST on import of services. The respondent, Sunil Biyani, was present during an inspection and was subsequently issued three summonses under Section 70 of the CGST Act. Instead of appearing, he sought adjournments and then filed for anticipatory bail, which was rejected by the Sessions Court. He then approached the High Court, which also rejected his anticipatory bail application but granted him protection from arrest for one week from the date of intimation of any order passed under Section 69 of the CGST Act. The Union of India appealed this protective order.

Key Issues

1. Whether the High Court, while rejecting an application for pre-arrest bail, could grant a protective order in the nature of interim relief against arrest for a specified period, upon passing of an order under Section 69 of the CGST Act? The petitioner (Union of India) argued that no interim relief can be granted when an application for pre-arrest bail is rejected, citing settled law that even when a petition to quash an FIR or charge-sheet is dismissed, no interim relief can be granted. The respondent (Sunil Biyani) contended that an order under Section 69 of the CGST Act must be communicated to the accused before arrest, extending principles of natural justice, to enable them to seek remedies like anticipatory bail, otherwise creating a 'catch-22' situation. 2. Whether the order passed by the Commissioner under Section 69 of the CGST Act is required to be communicated to the person sought to be arrested? The respondent argued for mandatory communication based on natural justice, while the petitioner did not explicitly argue against this point, but the judgment implies the issue was considered in light of the respondent's arguments.