Can CA be arrested- Section 69 vs. Section 132 of CGST Act

When it comes to goods and services tax (GST), chartered accountants (CAs) play a vital role in assisting the taxpayers in complying with the regulations. However, there have been instances where CAs have been arrested, and this has raised concerns among the accounting community. In this article, we delve into the legality of arresting CAs and the provisions under which they can be arrested.

Section 69 of CGST Act

Section 69 of the Central Goods and Services Tax (CGST) Act empowers the authorities to arrest a person if they believe that the person has committed an offence under the Act, which is punishable with imprisonment. The arrest can be made by an officer not below the rank of the Superintendent of CGST after recording reasons in writing.

The Section also requires that the arrested person be produced before a magistrate within 24 hours of the arrest. Additionally, if the person arrested is eligible for bail, they should be released on bail.

It is important to note that the officer who makes the arrest should have reasonable grounds to believe that the person has committed an offence under the Act, which is punishable with imprisonment.

Section 132 of CGST Act

Section 132 of the CGST Act provides for punishment for certain offences, which include fraudulent availment of input tax credit, issuance of invoices without supply of goods or services, and tax evasion. The punishment for such offences can range from imprisonment to cancellation of registration.

Under Section 132, if a person commits any of the offences mentioned, they can be punished with imprisonment for up to five years and a fine. If the amount involved exceeds Rs. 5 crore, the punishment can extend to up to 10 years of imprisonment along with a fine.

The Section also empowers the authorities to arrest a person without a warrant, if they have a reason to believe that the person has committed an offence under the Act, which is punishable under Section 132. The person arrested must be produced before a magistrate within 24 hours of the arrest. Additionally, if the person arrested is eligible for bail, they should be released on bail.

Can CAs be arrested under CGST Act?

Now that we understand the provisions under which a person can be arrested under the CGST Act, the question arises whether CAs can be arrested under the Act.

According to legal experts, CAs can be arrested if they are found to be involved in fraudulent activities related to GST. Under Section 132 of the CGST Act, if a person issues an invoice without any supply of goods or services, they can be punished with imprisonment. In such cases, if the CA is found to be involved in the fraudulent activity, they can be arrested.

Similarly, if a CA knowingly provides false information or suppresses any material information required under the Act, they can be held guilty and arrested under the provisions of the Act.

However, to avoid any legal complications, CAs should ensure that they comply with the regulations and assist their clients in complying with the provisions of the Act. In case of any doubts, they should seek expert opinion and advice.

Conclusion

In conclusion, CAs can be arrested under the provisions of the CGST Act if they are found to be involved in fraudulent activities related to GST. The provisions under which a person can be arrested are mentioned in Section 69 and Section 132 of the Act. Therefore, CAs should ensure that they comply with the regulations and assist their clients in complying with the provisions of the Act.