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The Supreme Court has clarified that a person facing possible arrest under the Central Goods and Services Tax (CGST) Act must be informed of the Commissioner’s arrest authorisation order before the arrest takes place. At the same time, the Court held that a High Court or Sessions Court cannot grant interim protection from arrest after dismissing an application for pre-arrest bail.
A Bench of Justice Dipankar Datta and Justice Sheel Nagu delivered the judgment on August 12, 2026, while dealing with an appeal arising from proceedings before the Bombay High Court.
Background of the Case
The Directorate General of GST Intelligence (DGGI), Mumbai Zonal Unit, was investigating Alphaneon Techsolutions Pvt. Ltd. and its group entities over allegations relating to wrongful availment and passing of Input Tax Credit, circular invoicing and non-payment of GST on imported services.
Sunil Biyani had been summoned three times under Section 70 of the CGST Act. After seeking adjournments, he approached the Sessions Court for anticipatory bail, which was rejected. He later moved the Bombay High Court.
The High Court also rejected his pre-arrest bail plea, observing that no arrest order under Section 69 had yet been passed. However, it directed that he should not be arrested for one week after being informed of any such order.
Supreme Court’s Observation
The Supreme Court first affirmed the rejection of the pre-arrest bail plea. It noted that merely receiving summons under Section 70 does not make a person an accused. The Court relied on its earlier ruling in Radhika Agarwal v. Union of India, observing that “mere issuance of summons” does not by itself make the summoned person an accused.
The Bench then examined whether the High Court could grant one-week protection after rejecting the bail application.
It held that once a pre-arrest bail application is dismissed, the court cannot provide further interim protection that could have been granted while the application was pending. Relying on earlier decisions including Hema Mishra v. State of U.P., the Court held that such protection cannot continue after dismissal of the main plea.
GST Arrest Order Must Be Communicated
The Court, however, accepted the respondent’s argument on communication of a Section 69 arrest order.
It held that the Commissioner’s order under Section 69, which must be based on recorded “reasons to believe”, has to be communicated to the person concerned before arrest. The Bench reasoned that such communication enables the person to seek the legal remedy of anticipatory bail and challenge the basis of the arrest authorisation.
The Court also noted that the order can be communicated electronically, including through the email address or mobile number furnished under the CGST registration framework.
Decision
The Supreme Court set aside the one-week protection granted by the Bombay High Court. It directed the Commissioner to communicate the Section 69 order to the respondent in the prescribed manner and clarified that “without such communication, question of arrest would not arise.”
The appeal was disposed of accordingly, while the pending investigation was directed to continue uninfluenced by the Court’s observations.
Case Details
Case Title: Union of India v. Sunil Biyani
Case Number: Criminal Appeal No. of 2026, arising out of SLP (Crl.) No. 12535 of 2026
Judge: Justice Dipankar Datta and Justice Sheel Nagu
Decision Date: August 12, 2026
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