The legislative provisions under the Haryana Goods and Services Tax Act, empowering arrests for tax evasion, are constitutionally valid and necessary for effective compliance.

LISA GILL, J. (Oral)

1. Challenge in this writ-petition is to the vires of Sections 69 and 132 of Haryana Goods and Services Tax Act, 2017 (for short, ‘HGST Act’) on the ground of lack of legislative competence and being violative of Article 13 of Constitution of India.

2. Learned counsel for respondents submit that controversy as involved in this petition is now squarely covered in favour of revenue in terms of judgment of Hon’ble the Supreme Court in Radhika Agarwal vs. Union of India and others, 2025(2) TMI 1162-Supreme Court (LB) Hon’ble the Supreme Court in the said case has upheld constitutional validity of Sections 69 and 132 of the Central Goods and Services Tax Act, 2017 (for short, ‘CGST Act’) which is analogous to HGST Act. It has been held by Hon’ble the Supreme Court as under:-

“75. The Parliament, under Article 246-A of the Constitution, has the power to make laws regarding GST and, as a necessary corollary, enact provisions against tax evasion. Article 246-A of the Constitution is a comprehensive provision and the doctrine of pith and substance applies. The impugned provisions lay down the power to summon and arrest, powers necessary for the effective levy and collection of GST. Time and again this Court has held that while deciding the issue of legislative competence, entries should not be read in a narrow or pedantic sense but given their broadest meaning and the widest amplitude because they are intrinsic to a machinery of government. Mineral Area Development Authority and Another v. Steel Authority of India and Another , (2024) 10 SCC 1; Hans Muller of Nurenburg v. Superintendent, Presidency Jail, Calcutta and Others , (1955) 1 SCR 1284; Elel Hotels & Investments Ltd. and Others v. Union of India, (1989) 3 SCC 698; State of Rajasthan v. G. Chawla and Another , 1958 SCC OnLine SC 33. The ambit of an entry or article laying down the legislative field extends to all ancillary and subsidiary matters which fairly and reasonably can be said to be comprehended in it. The United Provinces v. Mst. Atiqa Begum and Others, AIR 1941 FC 16 : 1940 SCC OnLine FC 11; Mineral Area Development Authority (supra); Express Hotels (P) Ltd. v. State of Gujarat and Another, (1989) 3 SCC 677; Sardar Baldev Singh v. Commissioner of Income Tax Delhi and Ajmer, 1960 SCC OnLine SC 147. This settled dictum regarding the interpretation of legislative entries equally applies to the special provision of Article 246-A of the Constitution. In the context of the legislative power to levy and collect tax, a Constitution Bench of Seven Judges in R.S. Joshi, Sales Tax Officer, Gujarat and Others v. Ajit Mills Limited and Another, (1977) 4 SCC

98 held:

“47. The principle in construing words conferring legislative power is that the most liberal construction should be put on the words so that they may have effect in their widest amplitude. None of the items in the List is to be read in a narrow restricted sense. Each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. All powers necessary for the levy and collection of the tax concerned and for seeing that the tax is not evaded are comprised within the legislative ambit of the Entry as ancillary or incidental. It is also permissible to levy penalties for attempted evasion of taxes or default in the payment of taxes properly levied.”

Thus, a penalty or prosecution mechanism for the levy and collection of GST, and for checking its evasion, is a permissible exercise of legislative power. The GST Acts, in pith and substance, pertain to Article 246-A of the Constitution and the powers to summon, arrest and prosecute are ancillary and incidental to the power to l