Facts of the Case: A batch of 26 connected writ petitions, led by Ankur Garg v. Union of India, challenged the constitutional validity of Sections 69 and 132 of the CGST Act, 2017 — the provisions empowering summons/arrest and prescribing punishment for specified GST offences. The petitioners contended that Parliament lacked legislative competence to enact these provisions and that they violated Articles 14, 20 and 21 of the Constitution. While the petitions were pending, the Supreme Court delivered its decision in Radhika Agarwal v. Union of India (2025), directly addressing the same constitutional questions concerning arrest and prosecution powers under the GST and Customs Acts.

Issues Involved:

  1. Whether Parliament had the legislative competence under Article 246A of the Constitution to enact Sections 69 and 132 of the CGST Act, conferring powers of arrest and prosecution.
  2. Whether these provisions violate Articles 14, 20 and 21 of the Constitution.

Petitioner's Arguments:

  • Sections 69 and 132 of the CGST Act, dealing with arrest and prosecution for GST offences, exceeded the legislative competence conferred by Article 246A, which is confined to the levy and collection of goods and services tax.
  • The provisions were arbitrary and violative of the petitioners' fundamental rights under Articles 14, 20 and 21.

Respondent's Arguments:

  • Learned counsel for the parties were ad idem that the controversy stood squarely covered in favour of the Revenue by the Supreme Court's decision in Radhika Agarwal v. Union of India, which had already upheld the constitutional validity of Sections 69 and 132.

Court Order / Findings:

  • The Court extracted the Supreme Court's reasoning in Radhika Agarwal, which held that Article 246A is a comprehensive special provision conferring on Parliament and State Legislatures the power to legislate on GST, and that this power, applying the doctrine of pith and substance, necessarily extends to ancillary provisions such as those against tax evasion, including powers of summons and arrest.
  • The Supreme Court had further clarified the pre-conditions for exercise of the arrest power under Section 132(5) — that the Commissioner must record explicit "reasons to believe," supported by material, that a non-bailable offence within the specified monetary threshold has been committed, and that arrest cannot be resorted to merely to investigate whether such conditions are met.
  • Applying this binding precedent, the Court held that the vires challenge to Sections 69 and 132 of the CGST Act no longer survived and rejected the prayer, disposing of all 26 connected writ petitions in terms of the Radhika Agarwal judgment.

Important Clarification:

  • Sections 69 and 132 of the CGST Act, empowering arrest and prescribing punishment for specified offences, are constitutionally valid as ancillary and incidental to Parliament's power under Article 246A to levy and collect GST and to prevent its evasion — but the power of arrest itself must be exercised strictly in accordance with the safeguards laid down in Radhika Agarwal, including recorded, material-backed "reasons to believe."

Sections Involved:

  • Section 69, CGST Act, 2017 — power to arrest.
  • Section 132, CGST Act, 2017 — punishment for certain offences.
  • Article 246A, Constitution of India — legislative power in respect of goods and services tax.

Decision – In Favour of: Department — the constitutional challenge to Sections 69 and 132 was rejected.

Case Details: High Court of Punjab and Haryana at Chandigarh; CWP-7147 of 2021 (O&M) with 26 connected matters; Coram: Hon'ble Mrs. Justice Lisa Gill and Hon'ble Ms. Justice Lapita Banerji; Date of Decision: 15.07.2025.

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