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This Court is of the prima facie view that both Sections 69 and 132 of the CGST Act are constitutional and fall within the legislative competence of Parliament.

Section 69 and 132 of the CGST Act, 2017— Powers of Arrest – The petitioners sought interim protection and the respondents sought vacation of interim protection granted vide order dated 20th August, 2020. The respondent on 20th August, 2020 submitted that in a similar matter the Supreme Court had directed that no coercive action be taken against the petitioner therein. On that basis, this Court granted interim protection. Subsequently respondent filed application for vacation of the interim protection on the ground that the interim order had been vacated by the Supreme Court on 31st August, 2020. The Petitioners counsel submitted that Sections 69 and 132 are unconstitutional as being provisions of criminal nature, they could not have been enacted under Article 246A of the Constitution of India, 1950. They emphasized that the power to arrest and prosecute are not ancillary and/or incidental to the power to levy and collect goods and services tax. They submitted that the procedure prescribed under the Act is not just, fair and reasonable. In this case no SCN had been issued either under Section 73 or Section 74. The Respondents submitted that Article 246A contains special provisions for making laws with respect to goods and services tax. CGST Act is a special enactment and in the absence of a specific provision to the contrary in the said Act, general provisions as laid down in the Cr.P.C. have to be followed. Present cases involved several non-functional and bogus firms that had fraudulently availed IGST refunds and/or ITC credits and had caused substantial loss to the Union of India. The court observed that GST is a unique tax, inasmuch as the power as well as field of legislation are to be found in a single Article 246A. The power of arrest conferred by Section 69 of the Act is not a general power of arrest, but is restricted to certain offences which are specified under Section 69 of the Act namely some of the offences covered under Section 132 of the Act. Held that:-The Hon’ble Court dismissed the interim relief with liberty to the petitioners to avail the statutory remedies. Further, allowed application filed by the respondents and vacated the interim order dated 20th August, 2020.
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