GST UPDATE

Hon’ble Court: Supreme Court of India
Case Title: Union of India v. Sunil Biyani
Appeal No. & Citation: Criminal Appeal No. of 2026 arising out of SLP (Crl.) No. 12535 of 2026

Hon’ble Judge(s)	Hon’ble Mr. Justice Dipankar Datta and Hon’ble Mr. Justice Sheel Nagu
Date of Order	12.08.2026
Outcome	Appeal allowed in favour of appellant

Brief Facts of the Case

The DGGI, Mumbai Zonal Unit, was investigating M/s Alphaneon Techsolutions Pvt. Ltd. and its group entities in respect of alleged wrongful availment and passing of Input Tax Credit without actual supply of goods or services, circular invoicing and non-payment of GST on import of services. During inspection of the registered premises, the respondent, Sunil Biyani, was found present and acknowledged the inspection. During the investigation, the Department issued three summonses under Section 70 of the CGST Act to the respondent. He initially sought adjournments instead of appearing and thereafter approached the Sessions Court seeking anticipatory bail. The Sessions Court rejected his application. The respondent thereafter approached the Bombay High Court. Pursuant to the directions of the High Court, he appeared before the Department and his statement was recorded. The Department stated that no order under Section 69 of the CGST Act had been passed, as the investigation was still at a nascent stage and the material facts were under verification.
The Bombay High Court consequently rejected the application for anticipatory bail, observing that in the absence of an order under Section 69 there could be no apprehension of arrest. However, while rejecting the application, the High Court granted him protection from arrest for one week from the date of intimation of an order under Section 69. Aggrieved by the protective portion of the order, the Union of India approached the Supreme Court.

Relevant Section

Sections 69, 70 and 132 of the CGST Act, 2017

Question before Hon’ble Court

Whether the High Court, while dismissing an application for pre-arrest bail, could grant protection from arrest for a specified period as an interim relief.
Whether an order passed by the Commissioner under Section 69 of the CGST Act authorising arrest is required to be communicated to the person sought to be arrested.

The judgement does not discuss the contentions of the parties separately, however the Apex Court has made detailed analysis of each of the issue involved along with the relevant provisions which are discussed as below.

Findings and Judgement

Mere issuance of summons does not make a person an accused
The Supreme Court relied upon its earlier decision in Radhika Agarwal v. Union of India, (2025) 6 SCC 545, and reiterated that a person summoned under Section 70 of the CGST Act is not per se an accused. Applying this principle to the present case, the Court noted that the respondent had merely been summoned when he sought pre-arrest bail. Since no order under Section 69 had been passed at that stage, the rejection of his application for anticipatory bail by the High Court was upheld.
Thus, the Supreme Court drew a clear distinction between investigation through summons and power of arrest. A summons under Section 70 cannot be equated with an arrest proceeding.
Interim protection should be ancillary to the main relief.
The next issue concerned the one-week protection granted by the Bombay High Court.
The Supreme Court referred to the settled principle laid down in State of Orissa v. Madan Gopal Rungta, that interim relief can only be granted in aid of and ancillary to the main relief. If the substantive relief itself is rejected, there cannot ordinarily be an independent interim relief surviving thereafter.
The Court also relied upon Hema Mishra v. State of U.P., (2014) 4 SCC 453, where it was held that after dismissal of a proceeding seeking quashing of an FIR or charge-sheet, further protection against arrest could not be granted as an incidental relief. The Supreme Court extended the same principle to pre-arrest bail proceedings. It held that while dismissing an application seeking pre-arrest bail, the High Court or Sessions Court cannot extend or grant protection which is in the nature of interim relief that could have been granted during pendency of the application.
Accordingly, the Supreme Court set aside the one-week protection from arrest granted by the Bombay High Court.
Section 69 order is the statutory foundation for seeking anticipatory bail
The Court thereafter examined the significance of a Section 69 order under the CGST Act.
Section 69 empowers the Commissioner to authorise arrest where he has “reasons to believe” that the person has committed specified offences under Section 132. The Supreme Court observed that such reasons must refer to the underlying material and evidence and must demonstrate application of mind. The Court held that an order under Section 69 is a sine qua non for seeking anticipatory bail. In other words, the statutory basis for arrest must first come into existence before the person can effectively invoke the remedy of pre-arrest bail against such arrest.
Further, the Court held that the reasons cannot be merely a formality. They must refer to the material and evidence on which the Commissioner's opinion is founded and must disclose application of mind.
This assumes significance because the validity of the arrest authorisation can subsequently be examined by a constitutional court. The Court expressly observed that the Section 69 order and the reasons to believe can be liable to judicial review. Thus, the mere existence of a Section 69 order may not by itself conclude the matter; the legality of the satisfaction recorded by the Commissioner can also be examined.
Communication of Section 69 order is mandatory
The most significant finding in the judgment relates to communication of the Section 69 order.
The respondent argued that if the Section 69 order is the necessary foundation for seeking anticipatory bail, it necessarily follows that the person sought to be arrested must be informed of such order. Otherwise, the person would not know that the stage at which the remedy of anticipatory bail becomes available has been reached. The Supreme Court accepted this contention.
The Court observed that it would be anomalous to hold that the Section 69 order is necessary for seeking anticipatory bail but that the person need not be informed of the existence of that order. Communication of the order does not obstruct the investigation; rather, it reinforces the right of the person concerned to seek appropriate judicial protection. The Court therefore directed the Commissioner to communicate the Section 69 order to the respondent and categorically reiterated that without such communication, the question of arrest would not arise. Therefore, communication of the Section 69 order assumes significance not merely as a procedural formality but as a safeguard which enables the affected person to meaningfully exercise his legal remedy.
The Court also considered the practical manner in which such communication can be effected. Reference was made to Rule 8 of the CGST Rules, which requires a person seeking registration to furnish an email address and mobile number. The Court therefore observed that communication of the Section 69 order may be made through electronic means, apart from other permissible modes under the BNSS and other legally recognised methods. The underlying objective is to ensure that the person concerned has actual notice of the arrest authorisation and can exercise the remedy available under law.

CA Pradeep Jain_

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