Anticipatory bail order stayed as absence of apprehension of arrest rendered grant legally suspect, subject to safeguard of prior notice

Case Reference

Directorate General of GST Intelligence v. Sidhant Gupta, Delhi High Court, CRL.M.C. 4612/2023, proceedings under Sections 69 and 70 of the Central Goods and Services Tax Act, 2017, category: GST investigation – Anticipatory bail, decided on 10 July 2023.

Facts

The Directorate General of GST Intelligence invoked the inherent jurisdiction of the High Court challenging the order of the learned Additional Sessions Judge dated 01 July 2023, whereby anticipatory bail had been granted to the respondent during the course of a GST investigation. The petitioner authority contended that before the Sessions Court it had made a categorical statement that there was no proposal or intention to arrest the respondent at that stage. Despite this, anticipatory bail was granted. The petitioner further highlighted that a separate petition questioning territorial jurisdiction of the Delhi courts was already pending consideration before the High Court (paras 1–4).

Questions for Consideration

The principal issue before the High Court was whether an order granting anticipatory bail could legally sustain when the investigating authority had expressly stated that there was no apprehension of arrest, and whether such an order travelled beyond the settled contours of Section 438 of the Code of Criminal Procedure as applied in GST investigations (paras 5–6).

Observations

The Court noted that anticipatory bail is predicated on a reasonable and imminent apprehension of arrest. It recorded the specific submission of the senior standing counsel for the GST department that there was no proposal to arrest the respondent at the relevant time. On this premise, the Court observed that the impugned order, on the face of it, required judicial scrutiny, as the very jurisdictional fact necessary for invoking anticipatory bail appeared absent. At the same time, the Court took note of the respondent’s argument that powers under Section 70 of the CGST Act operate in conjunction with the arrest power under Section 69, thereby creating an apprehension of custodial action. Balancing these considerations, the Court deemed it appropriate to stay the operation of the anticipatory bail order while ensuring procedural fairness to the respondent (paras 7–10).

Judgement

The Delhi High Court stayed the operation of the anticipatory bail granted by the Sessions Court, holding that the absence of any apprehension of arrest, as expressly stated by the department, rendered the grant of such relief prima facie unsustainable. However, as a protective measure, the Court directed that if the department subsequently formed an opinion to arrest the respondent, a prior notice of seven days must be given, thereby preserving the respondent’s liberty pending further adjudication. The matter was directed to be listed for further consideration (paras 11–13).

Relevant Statutory Provisions

• Section 69, CGST Act, 2017 – Power to arrest

• Section 70, CGST Act, 2017 – Power to summon persons to give evidence and produce documents

• Section 438, Code of Criminal Procedure, 1973 – Anticipatory bail (applied principles)

Cases Referred – Summary Table

Between the Fine Lines (Trade & Industry Takeaway)

This decision reinforces that in GST investigations, anticipatory bail is not a routine remedy and cannot be granted merely because summons or inquiry proceedings are ongoing. Where the department expressly states that no arrest is contemplated, courts are likely to view anticipatory bail orders with circumspection. At the same time, investigative agencies are expected to act transparently, as any subsequent decision to arrest may attract judicially mandated safeguards such as prior notice.

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