GST Authorities Arrest Man Who Appeared On Court's Direction: Punjab & Haryana HC Orders Immediate Release

The Punjab & Haryana High Court has ordered the immediate release of a man arrested by GST authorities after he appeared before them pursuant to the court's direction to cooperate with the investigation.

A Bench of Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor observed that Goyal had appeared before the authorities with the documents sought by them.

The matter was already pending before the court and was listed for September 29, when the authorities were expected to report on the status of the investigation.

The court held that the authorities should have informed it about any further development and sought its leave before proceeding against Goyal. It found that the manner in which he was detained and arrested prima facie violated Article 21 of the Constitution.

“Prima-facie we find the reasons for authorizing petitioner's arrest to be wholly misplaced inasmuch as the petitioner was already present before the authorities with all records and was willing to cooperate with the investigation under the orders of this Court. This Court was otherwise seized of the matter,” the court observed.

The case arose from the GST authorities' allegation that Goyal was not cooperating with the investigation. His counsel disputed this, submitting that he had already provided the documents sought by the authorities and had appeared before them several times.

On September 22, the court directed Goyal to appear before the authorities at 11 am the next day. The direction came after the revenue raised the issue of his alleged non-cooperation.

The court then listed the matter for September 29. The revenue was to apprise the court of the status of the proceedings after Goyal's appearance.

Goyal appeared before the authorities at 11 am on September 23, as directed. He was detained through the day and night, with his arrest formally shown at 4.45 am on September 24.

The authorities defended the arrest by arguing that there was no court order preventing them from arresting Goyal. They also pointed out that his anticipatory bail application had already been rejected.

The officers later told the court that Goyal's statement had been recorded when he appeared on September 23. They observed that his replies were evasive and that the competent authority consequently decided to arrest him.

The court was not persuaded by this explanation. It noted that the proceedings were pending before it and that the authorities had been directed to report back on September 29.

“The least that was expected on the part of the authorities was to have apprised the Court of any development and to proceed against the petitioner with the leave of the Court particularly when the matter was pending consideration and was specifically listed for 29.09.2026 for the authorities to report the status of the investigation,” the court observed.

The court further held that the authorities' approach amounted to an attempt to overreach the proceedings pending before it. It noted that the arrest authorization did not refer to the September 22 order or record that Goyal had already appeared with the documents sought by the authorities.

The court also criticised the manner in which the arrest was carried out. In its post-lunch proceedings, it described the conduct as “a brazen act of highhandedness” where “the constitutional safeguards available to a citizen have not been adhered to.”

The court also examined a summons issued to Goyal on September 23 under Section 70 of the Central Goods and Services Tax Act, 2017.

The summons required Goyal to appear at 12.05 pm on September 23, although he was already present before the authorities from 11 am pursuant to the court's order.

The court found prima facie manipulation in the summons. It noted that the summons referred to a Document Identification Number (DIN) generated at 12.07 pm, even though the summons required Goyal to appear at 12.05 pm.

“If the time for appearance was 12:05 pm, then the DIN ought to have been issued sometime prior to 12:05 pm,” the court observed.

The court also noted that Goyal's apprehension about being arrested had been raised during the September 22 hearing. His counsel had expressed concern that he might be arrested, but the court had observed that the issue was sub-judice and that Goyal should cooperate with the investigation.

The revenue's counsel was present during that hearing and was aware of the court's oral observations. The court observed that the authorities had nevertheless “shown scant regard for the judicial process.”

The court initiated proceedings concerning the conduct of Principal Commissioner, CGST, Ludhiana, Sugrive Meena, and SIO, CGST, Ludhiana, Mohmad Saleem. Both officers were impleaded in their personal capacities and issued notices to explain why appropriate observations should not be made against them and why the matter should not be recommended to the disciplinary authority for appropriate action.

Finding the action against Goyal prima facie violative of Article 21, the court directed the Chief Judicial Magistrate, Ludhiana to release him forthwith.

Goyal was directed to surrender his passport and not leave the country without the court's permission. He was also required to inform the concerned Commissioner of Police before leaving the district, along with his whereabouts and mobile number.

The court clarified that the release was purely an interim measure and should not be treated as an expression of opinion on the merits of the proceedings pending against him.

For Petitioner: Senior Advocate N.S. Boparai, with Advocates J.S. Bedi, Aakriti, Surya Pratap Singh, Ankit Jangra, Sumer Singh Boparai and Umang Goyal.

For Revenue: Senior Standing Counsel Naman Jain.For Respondent No. 4: Senior Standing Counsel Sourabh Goel with Advocate Himanshi Gautam.