CBIC issues guidelines on arrest, bail issues

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CBIC issues guidelines on arrest, bail issues

The GST investigation authority has asked field offices not to exercise the power to arrest in a mechanical manner and refrain from summoning senior management officials like CMDs and CEOs. The investigation authority under the Central Board of Indirect Taxes and Customs CBIC has issued guidelines to field officers on issuing summons and provision of arrest and bail under the Goods and Services Tax law. As an arrest is made on the personal liberty of an individual, such a measure should be based on credible material. It said that the arrest should not be made in routine and mechanical manner. The guidelines also provided a checklist for officers who wanted to arrest an alleged GST offender. The list includes questions like whether the person is a mastermind of the offence or tampering with evidence, intimidating witnesses and tampering witnesses. The Supreme Court decision was taken into account in the guidelines on arrest, where it was observed that merely because an arrest can be made because it is lawful does not mandate that an arrest be made. The apex court said that a distinction must be made between the existence of the power to arrest and the justification for exercising it. The guidelines said that the important factors before deciding to arrest a person must be that there are the need to ensure a proper investigation and not tampering with evidence or intimidating or influencing witnesses. According to the guidelines on summons, senior management officials such as CMD MD CEO CFO similar officers of any company or a PSU Public Sector Unit should not generally be issued summons in the first instance. It said that they should be summonsed when there are clear indications that they have been involved in the decision making process that led to loss of revenue. The GST investigation authority has been brought to the notice of the CBIC that field formations are issuing summons to top officials of companies in a routine way to call for material evidence, and that is why they are issuing the guidelines. Besides, summons have been issued to call for statutory records such as GSTR 3 B, GSTR-1, which are available online on the GST portal. The guidelines said that summons can be avoided by calling upon statutory documents which are digitally online on the GST portal. KPMG in India Partner Indirect Tax Abhishek Jain said in various instances summons were issued to CXOs for routine matters that could have been addressed by the tax department of the company. The guidelines reinstate the principle that CXOs should not be summoned at the first instance. Jain said that the guidelines provide that DIN should be mentioned in the summons, which will allow easy tracking of the summons. AMRG Associates Senior Partner Rajat Mohan said that the instructions would be to arrest the rampant harassment by grassroots-level GST officers.