Accused cannot be detained for more than 60 days without complaint under GST laws: Delhi HC

Accused/Taxpayer cannot remain in custody for more than sixty days unless complaint is filed under investigation of offenses under GST Act: Delhi HC

Resume: High Court of Delhi, v Commissioner of Central Revenue, GST vs. Adesh Jain (August 30, 2024) ruled that a taxpayer cannot be detained for more than 60 days unless the prosecution files a complaint after investigation under the GST laws. This decision is in line with Section 167(2) CrPC (now Section 187(3) Bharatiya Nagarik Suraksha Sanhita) which provides for the release of the accused on bail if the investigation exceeds the stipulated time. The case involved the Central Revenue Commissioner challenging the Chief Metropolitan Magistrate’s (CMM) order granting Adesh Jain bail, citing the department’s failure to file a complaint despite 60 days of remand. The High Court observed that Article 167(2) is a protective provision which ensures that persons are not detained indefinitely without charge. He noted that the prosecutor’s office did not complete the investigation and did not provide a valid reason for the delay even after five years. The court emphasized that the right to bail was recognized by the Supreme Court as a constitutional right, and dismissed the claim as unfounded. He also reiterated the importance of filing complaints in a timely manner as per the guidelines of the GST department.

introduction: High Court of Delhi in the case of Commissioner of Central Revenue, GST v. Adesh Jain (CRL. MC 2824 of 2019 dated 30 August 2024) dismissed the writ petition filed by the Department and held that the accused/taxpayer cannot be detained for more than sixty days unless a complaint has been filed following an inquiry into the offenses under the Goods and Services Tax Acts. The said relief was granted by invoking the powers under Section 167(2) of the Code of Criminal Procedure, 1973. (“CrPC”) (Now Section 187(3) Bharatiya Nagarik Suraksha Sanhita).

Facts:

Commissioner of Central Revenue, GST (“Applicant”) filed an appeal against the order of February 5, 2019 (the “disputed order”) accepted by the Chief Metropolitan Magistrate (CMM), Court of Patiala, New Delhi, at Commissioner of Central Revenue, GST Delhi (West) vs. Adarsh ​​Jain while Adarsh ​​Jain (“Accused/Defendant”) was released on bail.

The impugned order was passed on the ground that the investigation was not completed and no complaint was filed by the petitioner department despite the fact that the respondent spent sixty days in custody. The CMM thus granted bail to the accused invoking the powers of Section 167(2) CrPC.

Output:

Can the accused/taxpayer be detained for more than sixty days if the complaint has not been filed under the investigation of the offenses under the GST laws?

Held:

Delhi High Court in the matter CRL. MC 2824 of 2019 conducted as follows:

• They noticed that Section 167(2)(a)(ii) CrPC is a useful provision which provides relief to the accused if the investigating authority is unable to complete the investigation within sixty or ninety days. It categorically stipulates that if the prosecutor’s office cannot complete the investigation within the allotted time, the accused cannot be denied relief. The right to apply for bail under Section 167(2)(a)(ii) has been recognized by the Hon’ble Supreme Court as a constitutional right.
• He pointed out that the complaint in this case was not filed when the application under Section 167(2) CrPC was admitted for hearing and the respondent/accused had already spent sixty days in custody.
• He expressed the opinion that it is not clear why the complaint was not filed, since five years have passed, and the bail in this case is strongly opposed, thus, the filed court petition is groundless.
• Considering this, the claim is upheld.

Relevant provision:

Article 187(3) of Bharatiya Nagarik Suraksha Sanhita (Previous Article 167(2) of the Criminal Code)

Article 187: Procedure when the investigation cannot be completed within twenty-four hours

“(3) A Magistrate may authorize the detention of an accused person for a period exceeding fifteen days if he is satisfied that there are sufficient grounds for doing so, but no judge may authorize the detention of an accused person in custody under this section – section for a total period exceeding –

(i) ninety days if the investigation relates to an offense punishable by death, life imprisonment or ten years or more;

(ii) sixty days if the investigation relates to any other offence, and after the expiry of the said period of ninety days or sixty days, as the case may be, the accused shall be released on bail if he is willing to furnish and furnish bail, and every a person released on bail under this subsection shall be deemed released under the provisions of Chapter XXXV for the purposes of this Section.”

Our comments:

According to Instruction No. 04/2022-23 (GST investigation), issued by the GST Investigation Department, it was directed that the Department should make all possible efforts to lodge the complaint within 60 days of the seizure, keeping in view the above provision quoted above. The relevant paragraph has been reproduced here for reference:

“7. The procedure for prosecution:

7.1 In cases of seizure(s) made under section 69 of the CGST Act 2017:

7.1.1 If the investigation results in an arrest(s) without bail, every effort should be made to file a prosecutorial complaint with the court within sixty (60) days of the arrest. In all other cases of arrest, the complaint of the prosecutor’s office must also be submitted within the specified period.”

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