If you or your business is being investigated under the GST law and an officer threatens or makes an arrest, the most important thing to know is this: a GST arrest is not unlimited power. The officer must follow a defined procedure, give you the grounds of arrest in writing, and an arrest is only permissible for specified serious offences above a tax threshold. Understanding your GST arrest rights as the accused can be the difference between a lawful detention and an illegal one that a court will set aside.
This explainer walks an ordinary business owner, director, accountant, or consultant through what the law allows during a GST investigation, what safeguards apply after the Supreme Court's decision in Radhika Agarwal v. Union of India (27 February 2025), and what to do if you are summoned or arrested.
Who can be arrested under GST law and when
The power to arrest sits in Section 69 of the Central Goods and Services Tax Act, 2017. It does not apply to every dispute. An officer cannot arrest you simply because there is a tax demand or a difference of opinion on classification or input tax credit. Section 69(1) is triggered only where the Commissioner has reasons to believe that a person has committed an offence specified in clause (a), (b), (c) or (d) of Section 132(1) which is punishable under clause (i) or (ii) of that sub-section, or under Section 132(2).
Those four clauses are the deliberate-evasion offences:
- Clause (a), supplying goods or services without issuing an invoice, with intent to evade tax.
- Clause (b), issuing an invoice or bill without any supply, leading to wrongful input tax credit or refund. This is the fake-invoicing offence.
- Clause (c), availing input tax credit using such an invoice, or fraudulently availing credit without any invoice at all.
- Clause (d), collecting an amount as tax and failing to pay it to the Government beyond three months from the due date.
Nothing else in Section 132 supports an arrest under Section 69. A dispute about valuation, classification, place of supply, or an ordinary short payment does not.
The monetary thresholds that decide everything
Section 132(1) grades punishment by amount, and Sections 132(4) and 132(5) convert that grading into the practical question of whether you can be arrested and held at all.
| Amount of tax evaded, credit wrongly availed, or refund wrongly taken | Maximum punishment under Section 132(1) | Cognizable and non-bailable? |
|---|---|---|
| Exceeds Rs 500 lakh (Rs 5 crore) | Up to five years and fine, under clause (i) | Yes, under Section 132(5), for offences in clauses (a) to (d) |
| Exceeds Rs 200 lakh but not Rs 500 lakh | Up to three years and fine, under clause (ii) | No. Non-cognizable and bailable under Section 132(4) |
| Exceeds Rs 100 lakh but not Rs 200 lakh (clause (b) offences) | Up to one year and fine, under clause (iii) | No. Non-cognizable and bailable |
Section 132(6) adds a further filter: no person shall be prosecuted for any offence under that section except with the previous sanction of the Commissioner.
Key takeaway. The line that matters is Rs 5 crore. Under Section 132(4) all GST offences are non-cognizable and bailable except those in Section 132(5), which are the clause (a) to (d) offences punishable under clause (i), that is where the amount exceeds Rs 500 lakh. Below that figure, Section 69(3)(b) makes the Deputy or Assistant Commissioner an officer-in-charge of a police station for the purpose of releasing you on bail. So the first question your advocate should ask is not "was the arrest justified" but "what is the alleged amount, and does it actually cross five crore on the department's own numbers".
Four gates stand between a GST investigation and a lawful arrest.
Section 69(1)
The Commissioner must have reasons to believe that an offence in clause (a) to (d) of Section 132(1) has been committed before any arrest can be authorised.
Only four offences
Supply without an invoice, an invoice without supply, credit availed on such an invoice, and tax collected but unpaid beyond three months. Nothing else supports arrest.
The Rs 5 crore line
Only those offences above Rs 500 lakh are cognizable and non-bailable under Section 132(5). Everything else under the section is non-cognizable and bailable.
Section 132(6)
No person shall be prosecuted for an offence under that section except with the previous sanction of the Commissioner.
What the Supreme Court decided in Radhika Agarwal
In Radhika Agarwal v. Union of India, decided on 27 February 2025 by a Bench headed by the Chief Justice, the Supreme Court rejected the challenge to the constitutional validity of the arrest and summons powers under the GST Acts and the Customs Act, holding that the powers to summon, arrest and prosecute are ancillary and incidental to the power to levy and collect GST under Article 246A. But it upheld those powers "with elucidation and clarification on the pre-conditions and when and how the power of arrest is to be exercised", and that elucidation is what taxpayers should read.
- The money-laundering safeguards apply here too. The Court applied the reasoning developed in the PMLA line of cases, including Arvind Kejriwal, to Section 104 of the Customs Act and to the GST arrest power. The grounds of arrest must be given in writing to the arrestee before he is produced before the Magistrate, because that is what lets him contest the arrest and apply for bail.
- "Reasons to believe" cannot be hidden behind confidentiality. The argument that reasons to believe are an internal, confidential document that need not be disclosed was, in the Court's words, decisively rejected in Arvind Kejriwal. They are to be furnished so the arrestee can challenge the legality of the arrest, with redaction permitted only in exceptional cases.
- The CBIC has already changed its own instruction. The Court noted Instruction No. 01/2025-GST dated 13 January 2025, which now mandates that the grounds of arrest be explained to the arrested person and furnished to him in writing as an annexure to the arrest memo, with his acknowledgement taken.
- The Code applies. The criminal procedure code, read with Section 69(3) of the GST Acts, governs the arrest and the procedure following it, and the D.K. Basu directions must be complied with.
- Judicial review is real but limited. A court examining "reasons to believe" does not conduct a mini-trial or a merits review. It examines whether the officer had material and acted in accordance with law.
Threats of arrest to force a "voluntary" payment
This is the part of Radhika Agarwal that most directly protects ordinary businesses, and it is the part least often quoted to them.
Recovery under Section 79 of the CGST Act can only follow due process: a notice, and then confirmation of the demand by an adjudication order. CBIC's own Instruction No. 01/2022-23 dated 25 May 2022 says as much, and records that officers had been accused of using force and coercion to extract payments during search, inspection and investigation. Section 74(5) allows a taxpayer to pay tax with interest and a 15% penalty on his own ascertainment before a notice is served, but as the Court put it, that sub-section relates to voluntary payment and does not postulate payment under force, coercion or threat of arrest.
The Court held that these circulars are binding and must be followed in letter and spirit, that coercion and threats to arrest violate fundamental rights and the rule of law, and that there is no right in the tax authorities to compel or extract tax by threatening arrest. It asked CBIC to formulate clear guidelines so that no taxpayer is threatened with arrest for recovery of tax in the guise of self-payment. Critically, it held that where assessees are put under threat, force or coercion, they are entitled to move the courts and seek a refund of the tax deposited, and that the department should take appropriate action against the officers concerned.
Common mistake. Signing a DRC-03 at 2 a.m. during a search because an officer has said the directors will otherwise be arrested. That payment is not a settlement and it does not buy immunity. It is also not irreversible: after Radhika Agarwal a taxpayer coerced into depositing tax can move the court for a refund, and the department is expected to act against the officer. What destroys the claim later is the absence of a contemporaneous record. If you are pressed to pay during a search, say in writing on the spot that the payment is not voluntary, note the time and the officers present, and tell your advocate the same day.
The core safeguards, one by one
1. Grounds of arrest must be given in writing
Article 22(1) of the Constitution guarantees that no person shall be detained without being informed, as soon as may be, of the grounds for arrest, and shall have the right to consult and be defended by a legal practitioner of his choice. Section 69(2) of the CGST Act repeats the obligation for offences under Section 132(5). After Radhika Agarwal and CBIC Instruction No. 01/2025-GST, the grounds must be furnished in writing as an annexure to the arrest memo, not merely read out. If they are vague, withheld, or supplied as an afterthought, the arrest itself is open to challenge.
2. The right to test the reasons to believe
Section 69(1) requires the Commissioner to have reasons to believe, formed on material, before authorising arrest. Those reasons are furnished to the arrestee so the arrest can be challenged. An arrest on mechanical or non-existent reasons does not survive judicial scrutiny, although the court will not retry the merits of the tax case.
3. Protection against compelled self-incrimination
Article 20(3) protects a person accused of an offence from being compelled to be a witness against himself. Read this precisely: in Radhika Agarwal the Court clarified that a person summoned under Section 70 of the GST Acts is not per se an accused protected by Article 20(3). What remains impermissible is compulsion. The Court recalled Nandini Satpathy, in which compelled testimony was read to include evidence procured not merely by physical threats or violence but by psychic torture, atmospheric pressure, environmental coercion and tiring interrogative prolixity.
4. Production before a Magistrate within 24 hours
Section 69(2) of the CGST Act and Section 58 of the Bharatiya Nagarik Suraksha Sanhita, 2023 both require production within twenty-four hours of arrest, excluding the time necessary for the journey to court, unless a Magistrate has made a special order for detention under Section 187 BNSS.
5. Right to have someone informed, and to legal representation
Section 48 of the BNSS obliges the person making an arrest to inform a relative, friend or other nominated person of the arrest and of the place where the arrested person is held. Section 47 BNSS requires the arresting officer to communicate forthwith the full particulars of the offence or other grounds of arrest, and, in bailable cases, the right to bail. You are entitled to consult and be defended by an advocate of your choice, and courts have generally permitted counsel to be present during custodial interrogation within visible but not audible distance.
6. Bail
For a non-cognizable and bailable GST offence, that is anything outside Section 132(5), bail is essentially a right, and Section 69(3)(b) empowers the Deputy or Assistant Commissioner to release the person on bail. For an offence crossing the Rs 5 crore threshold you apply to court under Section 480 BNSS, or to the Court of Session or High Court under Section 483 BNSS. Where arrest is only apprehended, Section 482 BNSS allows an application for anticipatory bail.
CrPC to BNSS: note the renumbering
Much of the arrest procedure that supplements the CGST Act historically sat in the Code of Criminal Procedure, 1973. From 1 July 2024 the CrPC was replaced by the Bharatiya Nagarik Suraksha Sanhita, 2023, and the Indian Penal Code by the Bharatiya Nyaya Sanhita, 2023. The CGST Act's own numbering (69, 70, 132) is unchanged, but every cross-referenced procedural section has moved.
| What it does | Old CrPC section | Current BNSS section |
|---|---|---|
| Arrested person to be informed of grounds of arrest and of right to bail | Section 50 | Section 47 |
| Obligation to inform a relative or friend of the arrest | Section 50A | Section 48 |
| No detention beyond twenty-four hours without a Magistrate's order | Section 57 | Section 58 |
| Remand where investigation cannot be completed in twenty-four hours | Section 167 | Section 187 |
| Bail in a non-bailable offence | Section 437 | Section 480 |
| Anticipatory bail | Section 438 | Section 482 |
| Special powers of the High Court or Court of Session regarding bail | Section 439 | Section 483 |
Older judgments, arrest memos and even some departmental forms still cite the CrPC numbers. Verify the current section before filing anything.
Summons vs arrest: know the difference
| Aspect | Summons under Section 70 | Arrest under Section 69 |
|---|---|---|
| What it is | A notice to appear and give evidence or produce documents, with the powers of a civil court | Physical detention of the person |
| Trigger | Any inquiry under the GST Acts | Commissioner's recorded reasons to believe a Section 132(1)(a) to (d) offence |
| Your obligation | Attend in person or by authorised representative under Section 70(1A), state the truth, produce records | Comply with a lawful arrest; you cannot resist |
| Key right | No compulsion or coercion; you may be assisted by counsel. Note that a summonee is not per se an accused under Article 20(3) | Grounds of arrest in writing; Magistrate within twenty-four hours |
| Does it mean guilt? | No, it is part of an inquiry | No, arrest is not conviction |
| Can you ignore it? | No, non-appearance has consequences | Not applicable |
A common and costly mistake is treating a summons as an arrest, panicking, and either absconding or making unguided statements. A summons is an opportunity to present your side in an orderly way, ideally after consulting an advocate.
What to do if you are summoned or arrested
If you receive a GST summons
- Do not ignore it. Note the date, time, the officer's name and designation, and exactly what is sought.
- Gather records. Returns, invoices, e-way bills, ledgers, bank statements and reconciliations for the period in question.
- Consult an advocate before the statement, especially where large amounts or alleged fake invoicing are involved.
- Answer truthfully but precisely. Do not speculate, do not guess at figures, and do not sign blank or pre-typed statements you have not read.
- Do not pay under pressure. If a deposit is pressed on you during the proceeding, record in writing that it is not voluntary.
- Keep copies of everything you submit and take an acknowledgement.
If an arrest is made
- Ask for the grounds of arrest in writing, as an annexure to the arrest memo, and keep your copy.
- Check the alleged amount against the Rs 5 crore threshold in Section 132(5), because that determines whether the offence is even non-bailable.
- Inform a family member or friend. Section 48 BNSS obliges the officer to do this, and you can nominate the person.
- Call your advocate immediately.
- Do not sign anything you have not read and understood.
- Ensure production before a Magistrate within twenty-four hours and have the bail application ready before you get there.
Deadline warning. Twenty-four hours is the whole window, and it excludes only the journey to court. Everything that will decide the next several weeks, the written grounds, the arrest memo, the medical examination record, the intimation to your family, and a drafted bail application, has to be assembled inside it. Do not spend the first twelve hours negotiating with the department. Brief an advocate in the first hour, because a defect in the arrest is far easier to raise at the first remand hearing than to resurrect a month later.
Four things have to be secured inside that window.
Grounds in writing
Ask for the grounds of arrest as an annexure to the arrest memo and keep your copy. Grounds that are vague or withheld open the arrest to challenge.
Check the alleged amount
Test the department's figure against the Rs 5 crore threshold in Section 132(5), because that is what decides whether the offence is non-bailable at all.
Tell family and counsel
Section 48 of the BNSS obliges the officer to inform a relative or friend of the arrest and where you are held, and you can nominate that person.
Twenty-four hours
Production before a Magistrate is due within twenty-four hours, excluding the journey to court, so the bail application should be ready before you get there.
Why this matters for businesses, not just "evaders"
GST investigations increasingly touch genuine businesses caught in a supply chain where a supplier further up the line issued fake invoices. You may have paid in good faith and still face a notice. The arrest safeguards exist precisely so that a coercive power is not used as a shortcut to recover disputed tax before any assessment or adjudication has taken place. Knowing the boundaries protects honest taxpayers as much as it constrains misuse.
If you are facing a GST investigation, summons, or the threat of arrest, our criminal defence and prosecution practice can explain the procedure that applies to your facts. You may also find our guides on responding to a GST summons under Section 70 and anticipatory bail in economic offence cases useful background. The arrest and summons provisions are published on CBIC's official statute repository: Section 69, Section 70 and Section 132 of the CGST Act, 2017.
Frequently Asked Questions
Can I be arrested under GST just for a tax demand?
No. A demand, an audit objection, or a disagreement on classification or input tax credit does not justify arrest. Section 69 applies only to the offences in Section 132(1)(a) to (d), supported by the Commissioner's recorded reasons to believe, and only above the statutory thresholds.
Must the GST officer give me the grounds of arrest in writing?
Yes. In Radhika Agarwal v. Union of India the Supreme Court held that grounds of arrest must be given in writing before production before the Magistrate, and CBIC Instruction No. 01/2025-GST dated 13 January 2025 requires them to be furnished as an annexure to the arrest memo with your acknowledgement taken.
What amount makes a GST offence non-bailable?
Under Section 132(5), the clause (a) to (d) offences are cognizable and non-bailable where the amount exceeds Rs 500 lakh, that is Rs 5 crore. Section 132(4) makes every other offence under the section non-cognizable and bailable.
How soon must I be produced before a Magistrate?
Within twenty-four hours of arrest, excluding the time needed for the journey to court, under Section 69(2) of the CGST Act read with Section 58 of the BNSS.
Can I get bail in a GST case?
For a bailable offence, yes, and Section 69(3)(b) lets the Deputy or Assistant Commissioner release you. For a non-bailable offence you apply under Section 480 BNSS, or to the Court of Session or High Court under Section 483. Anticipatory bail is available under Section 482 BNSS where arrest is apprehended.
Do I have to attend a GST summons under Section 70?
Yes. Section 70(1A) makes every person summoned bound to attend, in person or through an authorised representative as directed, and to state the truth. Non-appearance has consequences.
Am I protected by Article 20(3) when I am summoned?
Not automatically. The Supreme Court clarified in Radhika Agarwal that a person summoned under Section 70 is not per se an accused protected by Article 20(3). What is prohibited is compulsion, which the Court, following Nandini Satpathy, reads to include psychological pressure and intimidatory interrogation, not just physical threats.
Can my lawyer be present during questioning?
Courts have generally permitted an advocate to be present within sight but not within hearing during custodial interrogation. Confirm the practice your court follows.
Officers pressed me to pay tax during a search. Can I get it back?
Potentially, yes. Recovery under Section 79 requires a notice and an adjudication order, and the Supreme Court held that where an assessee is put under threat, force or coercion, he is entitled to move the court and seek a refund of the tax deposited, with action to be taken against the officers concerned. Contemporaneous evidence that the payment was not voluntary is what makes such a claim work.
Are the CrPC bail sections still valid for GST?
The CrPC was replaced by the BNSS from 1 July 2024, so the procedural sections are renumbered. Section 437 is now 480, Section 438 is now 482, Section 439 is now 483, Section 57 is now 58 and Section 167 is now 187. The CGST Act sections 69, 70 and 132 are unchanged.
This article is for general informational purposes only and does not constitute legal advice. Laws change and every situation is different; please consult a qualified advocate about your specific matter.
