Kuldeep Goyal v. Union of India and Others

What happened

The petitioner is the Karta of a Hindu undivided family that runs a steel alloys business, M/s Ansh Steel Alloys, registered under the CGST and PGST Acts. His wife filed this petition on his behalf to set aside the arrest memo of 24 September 2026 and the authorisation for arrest of 23 September 2026. The firm had earlier filed CWP-18184-2026 against the attachment of its bank account, saying that no show cause notice had been issued and no personal hearing given. On 8 July 2026 the Court noted that contention and gave the revenue two weeks, notice of motion issued on 23 July 2026, and on 22 September 2026 the revenue said the petitioner was not cooperating in the investigation while he said that all documents had been furnished and that he had appeared several times. The Court then recorded his statement that he would appear before the authorities at 11:00 am the next day, directed the revenue to inform the Court of the position if he did so, and listed the matter on 29 September 2026. He appeared on 23 September 2026 and, he says, was kept in the office for the whole day and night. A summons under section 70 of the CGST Act was issued at 12:05 pm that day, requiring him to appear the same day, and the arrest was shown at 4:45 am on 24 September 2026. The revenue's counsel argued that there was no stay of arrest and that his anticipatory bail had been rejected, so the arrest was lawful.

Questions before the court

• Could the authorities arrest a taxpayer who had just appeared at the High Court's direction in a pending writ, without telling the Court?
• Was the petitioner entitled to interim release while the larger proceeding remained pending?

Why the court ruled this way

The Court was not impressed by the revenue's plea. It had directed the petitioner to appear at 11:00 am on 23 September 2026 to secure his cooperation and had adjourned the matter to 29 September 2026, when the authorities were to report on their complaint of non-cooperation. The least expected of them was to inform the Court of any development and to proceed against him with its leave. Detaining him at 11:00 am and arresting him at 4:45 the next morning showed undue haste and, prima facie, a brazen violation of Article 21 (pre-lunch order, paragraph 7). The approach of the authorities amounted, prima facie, to overreaching the proceedings before the Court (paragraph 8). In the post-lunch order the Court noted that the summons carried a time of appearance of 12:05 pm while its document identification number was generated at 12:07 pm, and found manipulation in the summons prima facie. It also held the three reasons recorded for the arrest, which were to prevent further offences, to secure an unhindered investigation and to prevent tampering with evidence or inducement of witnesses, to be wholly misplaced, because the petitioner was already present with the records and willing to cooperate. The authorisation did not mention the Court's orders or his appearance, and the routine way in which such authorisations are issued left much to be desired (post-lunch order, paragraphs 9–12).

Controlling point

Prima facie, an arrest made while the High Court is seized of the matter and has directed the taxpayer's appearance, without informing the Court or seeking its leave, overreaches the pending proceedings and violates Article 21, so interim release is warranted.

Order and next steps

The Court impleaded the Principal Commissioner, CGST, Ludhiana, and a Senior Intelligence Officer of that Commissionerate in their personal capacity as respondents 5 and 6, and issued notice calling on them to explain their conduct and to show why observations recommending disciplinary action should not be made. It directed the Chief Judicial Magistrate, Ludhiana to release the petitioner forthwith, on condition that he surrenders his passport, does not leave the country without the Court's permission and informs the Commissioner of Police with his whereabouts and mobile number before leaving the district. The release is purely an interim measure and does not express any opinion on the merits. The matter was listed on 29 September 2026.

Practical implications

A taxpayer who is directed by a High Court to appear in an investigation should keep a record of the time of appearance, the summons, its document identification number and the endorsement that he appeared under the Court's order. The authorities, in turn, should place any intended coercive step before a Court that is already seized of the matter.

Limits of this ruling

• These are prima facie findings on an interim application; the Court said that the release is not an opinion on the merits of the proceedings against the petitioner, and the explanation of the two officers and the main petitions remained pending.