The Punjab & Haryana High Court (Chandigarh Bench) came down heavily on the GST Authorities who illegally arrested a steel trader despite having joined investigation pursuant to an interim order passed by the High Court. Emphasising that Court-monitored cooperation is not a waiver of personal liberty safeguards, and formulaic arrest authorisations will not survive judicial scrutiny when Article 21 is engaged, the High Court held that GST authorities cannot treat a Court-directed appearance as a charter to arrest the assessee without apprising the Court, particularly when the matter is listed for a status report on cooperation.
The High Court strongly said that detaining an assessee from morning and recording formal arrest at 4:45 AM the next day, after he appeared pursuant to specific Court directions, prima facie violates Article 21 and amounts to overreaching judicial proceedings. Further, standard, formulaic reasons to believe, preventing further offence, ensuring investigation, and preventing tampering with evidence, are insufficient when the assessee is already before the authority with all records under Court-monitored cooperation.
Since, issuing a summons with a back-timed DIN prima facie indicates manipulation of records and cannot be the basis for lawful arrest, the Court directed release of the assessee as an interim measure subject to surrender of passport, restriction on leaving the country without Court permission, and intimation to the Commissioner of Police before leaving the District.
The Division Bench comprising the Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor was not impressed by the revenue’s plea that the absence of a stay on arrest justified the action, since the Court was already seized of the matter and had specifically directed the petitioner’s appearance at 11:00 AM on Sep 23, 2026, to facilitate cooperation in the investigation. The least that was expected of the authorities was to apprise the Court of any development before proceeding against the petitioner, particularly when the matter was listed for Sep 29, 2026, for a status report. The undue haste in detaining the petitioner from 11:00 AM and showing his arrest at 4:45 AM the next morning was, prima facie, a brazen violation of Article 21 of the Constitution.
The Court further noted that the action of the authorities amounted to overreaching the pending proceedings. The reasons recorded for authorizing arrest, preventing further offence, ensuring proper investigation, and preventing tampering with evidence, were found to be wholly misplaced, as the petitioner was already present with all records and willing to cooperate under the Court’s orders. The authorization for arrest made no reference to the Court’s orders or to the fact that the petitioner had already appeared with records. The Court also flagged the manipulation in the summons, where the DIN was generated at 12:07 PM while the summons recorded the time of appearance as 12:05 PM, observing that if the appearance time was 12:05 PM, the DIN ought to have been generated prior to that.
The Court noted that the Principal Commissioner, CGST, Chandigarh had itself issued a circular on Aug 24, 2026, on grievances regarding enforcement proceedings, suggesting safeguards, which the officers appeared to have ignored. The Court recorded that the apprehension of arrest expressed by the petitioner’s counsel on Sep 22, 2026, had been dispelled with the observation that the issue was sub-judice and the petitioner must cooperate, and the authorities were well aware of this through their counsel, yet showed scant regard for the judicial process.
Briefly, Kuldeep Goyal, Karta of an HUF running M/s Ansh Steel Alloys, approached the Punjab & Haryana High Court seeking to quash the arrest memo and the authorization for arrest dated Sep 23, 2026. The petitioner had earlier approached the Court challenging the attachment of his bank account on the ground that no show cause notice had been issued, and no personal hearing had been granted. On Sep 22, 2026, while hearing that petition, the Court directed the petitioner to appear before the GST authorities at 11:00 AM on 23.09.2026 to test his bona fides, and adjourned the matter to Sep 29, 2026, requiring the revenue to report the status of cooperation.
The petitioner complied and appeared at 11:00 AM on Sep 23, 2026, with all documents. Despite this, the authorities detained him from 11:00 AM, kept him in their office through the day and night, and formally recorded his arrest at 4:45 AM on Sep 24, 2026. A summons under Section 70 of the CGST Act, 2017 was issued at 12:05 PM on Sep 23, 2026, after the petitioner was already present, and the DIN was generated only at 12:07 PM, raising a serious allegation of ante-timing/manipulation of records. The petitioner’s anticipatory bail had already been rejected, and the revenue argued that since there was no stay on arrest, the action was legal.
