“Arrest First, Ask Later” Won’t Fly: A Welcome Course-Correction from the Calcutta High Court on GST Arrests
Gopal Rathi Vs Ratan Banik (Calcutta High Court) and Santosh Kumar Sah Vs Union of India (Calcutta High Court)
Why this moment matters
The Calcutta High Court has sent a clear, timely message on GST enforcement: personal liberty and statutory safeguards are not optional, even in serious economic offence investigations. By granting bail in two recent matters—first in Santosh Kumar Sah and now in Gopal Rathi—the Court has realigned practice with principle, insisting that the investigative state follow the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) sequence before resorting to coercive custody. This correction is not anti-enforcement; it is pro-rule-of-law.
The Gopal Rathi order: BNSS 35(3) is not a nicety, it’s mandatory
In the Rathi bail order, the Court underscored two decisive points: one, that the petitioner had consistently complied with summons; and two, that no notice under Section 35(3) BNSS was served before arrest despite the alleged offence carrying a maximum five-year sentence. The Court concluded that whether ITC was wrongfully availed via forged invoices is a matter ascertainable from documents already seized and through further collection, custodial interrogation was unnecessary in the circumstances. Forty days of detention, the Court held, would serve no useful purpose. This is the right constitutional instinct.
The earlier Santosh Kumar Sah order: let evidence; not analytics; drive arrests
In Santosh Kumar Sah, the Court dismantled the practice of treating toll-plaza “no record” flags as a proxy for non-movement of goods when primary evidence said otherwise. Physical stock matched invoice and batch numbers; CCTV confirmed unloading; and the Department’s own panchanama supported actual receipt, rendering the arrest disproportionate, premature, and legally unjustified absent fresh incriminating material or adjudication. The lesson is straightforward: paper-and-video evidence outweighs inferential red flags; arrest is not a shortcut to investigation.
The Supreme Court’s reinforcement: how BNSS 35 must actually work
The Supreme Court has now reaffirmed the architecture of BNSS Section 35: if arrest isn’t immediately necessary, the agency must serve a physical notice to appear under 35(3); compliance under 35(4)-(5) generally bars arrest; and even non-compliance doesn’t create an arrest mandate-specific, case-linked reasons are required under 35(6). Crucially, the Court has rejected WhatsApp and other e-service for Section 35 notices, holding that the legislature intentionally excluded electronic service for an executive act that directly implicates liberty. That standard binds GST investigations, which are executed by tax officers exercising police-like powers.
What this means for GST enforcement
1. Section 35(3) BNSS notice is a hard precondition where immediate arrest isn’t necessary, particularly in 5-year maximum offences commonly invoked in GST cases.
2. Documentary cases demand documentary diligence: when primary materials (seized records, stock tallies, CCTV, transport proofs) exist, custody rarely advances the inquiry; it often merely punishes pre-trial.
3. “Economic offence” is not a magic phrase: gravity does not displace due process; it elevates the need for disciplined adherence to statutory safeguards.
4. These are not technicalities, they are the operational rules that keep enforcement legitimate and sustainable.
A principled playbook for agencies
1.Serve Section 35(3) notices physically, in modes permitted by law; abandon informal or electronic shortcuts for executive notices.
2. Treat compliance history as a liberty anchor: consistent appearance and cooperation weigh heavily against arrest absent new, concrete grounds.
3. Record specific reasons that justify any shift from notice to arrest; generic invocations of “gravity” or “conspiracy” won’t do.
4. Prioritize primary evidence over derivative analytics: where stock, batch mapping, and CCTV corroborate receipt, toll-data anomalies cannot sustain custody.
The judiciary’s throughline
Across both Calcutta High Court orders, a coherent theme emerges: in GST investigations that are inherently document-driven, arrest is an exception, not the rule. And with the Supreme Court’s insistence on the integrity of Section 35 BNSS service and sequencing, the message is uniform: liberty cannot yield to administrative convenience.
Wake‑up call for authorities.
In Santosh Kumar Sah, the Calcutta High Court reminded investigators that the CGST department is the “State” within Article 12, not a private individual and must therefore act with constitutional restraint and fairness. Its mandate is twofold: to safeguard the revenue, and equally, to ensure that taxpayers and businessmen are not subjected to unnecessary harassment, reputational harm, or deprivation of liberty without strict adherence to statutory safeguards. That means applying mind to primary evidence, honoring BNSS 35(3) before any arrest, and reserving custody for exceptional circumstances, not as a routine investigative device.
An invitation to recalibrate
This is a welcome decision and a welcome moment to recalibrate GST enforcement around statutory sequence, evidentiary hierarchy, and constitutional restraint. The takeaway for administrators: follow BNSS 35 to the letter, let records lead the way, and reserve custody for demonstrable necessity, not suspicion. The takeaway for industry: document meticulously, cooperate consistently, and assert safeguards confidently when the process strays.
Arrest at the Commissioner’s whim is not enforcement, it’s error. The Calcutta High Court has reminded us of the difference, and the Supreme Court has supplied the operating manual. It’s time to comply.
Author Bio
