Facts of the Case:

The Directorate General of GST Intelligence (DGGI) initiated an investigation against M/s Alphaneon Techsolutions Pvt. Ltd. and its group entities on allegations of wrongful availment and passing of Input Tax Credit (ITC) without actual supply of goods or services, circular invoicing arrangements, and non-payment of GST on import of services. During the inspection of the registered premises, Sunil Biyani, the respondent, was found present and acknowledged the inspection proceedings.

During the course of investigation, the Department issued three summons under Section 70 of the Central Goods and Services Tax Act, 2017 (CGST Act) requiring the respondent’s appearance. Instead of appearing initially, the respondent sought adjournments and thereafter approached the Sessions Court, Mumbai, seeking anticipatory bail. The Sessions Court rejected the application. Subsequently, the respondent filed an anticipatory bail application before the Bombay High Court.

During the hearing before the High Court, the Department filed an affidavit stating that no order authorizing arrest under Section 69 of the CGST Act had been passed because the investigation was still at a preliminary stage and relevant facts were under verification. Taking note of this position, the High Court held that in the absence of an order under Section 69, there was no imminent apprehension of arrest and therefore the anticipatory bail application was not maintainable. However, while rejecting the application, the High Court granted protection to the respondent by directing that he should not be arrested for one week from the date of communication of any future order passed under Section 69.

Aggrieved by the grant of such protective relief despite rejection of anticipatory bail, the Union of India challenged the High Court’s order before the Supreme Court.

Issue:

Whether a High Court, after dismissing an anticipatory bail application as not maintainable, could nevertheless grant interim protection against arrest for a specified period. Whether an order passed by the Commissioner under Section 69 of the CGST Act authorizing arrest must be communicated to the person sought to be arrested before such arrest is effected.

Held That:

The Supreme Court allowed the appeal filed by the Union of India and set aside the protective direction granted by the Bombay High Court.

The Court held that once a court dismisses an anticipatory bail application, whether on merits or on the ground of non-maintainability, it cannot simultaneously grant interim protection against arrest. Relying on the Constitution Bench decision in State of Orissa v.Madan Gopal Rungta and the decision in Hema Mishra v. State of U.P., the Court reiterated that interim relief can only be granted in aid of the principal relief sought. When the principal relief itself is refused, no ancillary protection can survive.

Accordingly, the Supreme Court held that the High Court committed a legal error in granting one week’s protection from arrest after rejecting the anticipatory bail application.

However, while deciding the appeal, the Supreme Court proceeded to examine an important question concerning the operation of Section 69 of the CGST Act. The Court observed that an order authorizing arrest under Section 69 can be issued only when the Commissioner forms “reasons to believe” that a person has committed specified offences under Section 132 of the CGST Act. Such reasons must be based on material evidence and must demonstrate application of mind.

The Court accepted the respondent’s contention that the order under Section 69 is the triggering event that enables a person to seek anticipatory bail. Since the right to apply for anticipatory bail arises only after such authorization is issued, the affected person must necessarily be informed of the order.

The Supreme Court held that communication of the Section 69 order is indispensable because otherwise a person would be deprived of the opportunity to challenge the validity of the Commissioner’s satisfaction and seek protection of personal liberty through anticipatory bail proceedings. The Court observed that withholding the order would create an anomalous situation where a person could neither challenge the arrest authorization nor avail the remedy of anticipatory bail.

Emphasizing the constitutional importance of personal liberty, the Court relied upon the principles laid down in Gurbaksh Singh Sibbia v. State of Punjab and Sushila Aggarwal v. State (NCT of Delhi). The Court held that any interpretation that unduly restricts access to anticipatory bail would be inconsistent with constitutional guarantees under Article 21.

Consequently, the Supreme Court ruled that before effecting arrest under Section 69, the Commissioner’s authorization order must be communicated to the person concerned. The Court clarified that such communication may be made through electronic means, including the registered e-mail address and mobile number available with the GST authorities, in addition to any other legally permissible modes of communication.

addition to any other legally permissible modes of communication.

Most significantly, the Court categorically declared that without communication of the order passed under Section 69, the question of arrest does not arise.

The Court therefore directed that if any order under Section 69 is passed against the respondent, the same must first be communicated to him, whereafter he would be at liberty to pursue remedies available in law, including anticipatory bail.

Case Name: UNION OF INDIA Vs SUNIL BIYANI dated 12.08.2026

Citation No. 2026 Taxo.online 2392