Recently, the Supreme Court in the case of Gagandeep Singh v. Union of India, W.P. (Crl) No. 339/ 2023, Gagan Kakkar v. Union of India, W.P. (Crl) No. 357/ 2023 on 25.08.2023, issued notice in two similar writ petitions filed under Article 32 of the Constitution of India, challenging the constitutional validity of several provisions of the Central Goods and Services Tax Act, 2017 (CGST Act) including Section 69 (i.e., power to arrest), 70(1) (i.e., power to summon persons to give evidence and produce documents). The Court has further stayed any coercive steps against the petitioners. The Bench comprised Justices Sanjay Kishan Kaul and Sudhanshu Dhulia.

As per the said petitions, 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.

Elucidating the same, petitioners 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. Therefore, Sections 69 and 70 of the CGST Act are beyond the legislative competence of the Parliament.

Further, it was 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 an ‘accused’. Also, the said officers are not police officers, and no protection under Article 20(3) of the Indian Constitution is available to the summoned persons, thereby causing immense prejudice to the Petitioners.

The petitions have also listed the matters already pending before the Apex Court with respect to mandatory compliance of procedure prescribed under the Code of Criminal Procedure, 1973 (CrPC) for investigating an offence under the same special act i.e. CGST Act, 2017.

In the present petitions, an investigation was initiated by the office of the Respondent No.2 concerning certain allegations of evasion/ non-payment of GST.

Based on these circumstances, Petitioners have filed the present petitions, apprehending coercive action by the Respondents, and have sought quashing of the proceedings initiated and continued against the Petitioners under the CGST Act, in an alleged non-cognizable offence, without following the procedure established by law and prescribed under Chapter-XII of the CrPC, more particularly in Sections 154 to 157 and Section 172 thereof.