The Goods and Services Tax (GST) investigation authority has directed its field offices refrain from summoning senior management officials like CMDs and CEOs.
The investigation authority under the Central Board of Indirect Taxes and Customs (CBIC) has also asked them not to exercise the power to arrest in a mechanical manner.
This was part of the guidelines issued to field officers by the authority on issuing summons and provision of arrest and bail under the Goods and Services Tax (GST) law.
It said that as arrest impinges on the personal liberty of an individual, such a measure should be based on credible material. “The arrest should not be made in routine and mechanical manner,” it said.
The guidelines also provided a checklist for the officers wanting to arrest an alleged GST offender. The list includes questions like whether the alleged offender is likely to tamper with evidence or intimidate witnesses, and if the person is mastermind of the offence committed.
The guidelines on arrest take in account the Supreme Court judgement wherein it was observed that “merely because an arrest can be made because it is lawful does not mandate that arrest must be made”.
The apex court had further 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 relevant factors before deciding to arrest a person, apart from fulfilment of the legal requirements, must be that the need to ensure proper investigation and prevent the possibility of tampering with evidence or intimidating or influencing witnesses exists.
About the instructions with regard to summons, the guidelines said that 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.
“They should be summoned when there are clear indications in the investigation of their involvement in the decision making process which led to loss of revenue,” it said.
