The Allahabad High Court quashed arrests made by DGGI under the Health Security se National Security Cess Act, 2025, applying Sunil Biyani to hold that reasons to believe must reach the accused.

The Allahabad High Court has held that the Commissioner’s reasons to believe for an arrest under Section 26 of the Health Security se National Security Cess Act, 2025 must be communicated to the accused, and that placing them before the Magistrate at remand does not meet this requirement. [Nikhil Aggarwal and Another v. Union of India and Another, 2026-juristway.com-3143-HC(Allahabad)-GST]

A Division Bench of Justice Atul Sreedharan and Justice Achal Sachdev quashed the arrests in a habeas corpus petition and directed the petitioners’ release, if not wanted in any other case.

DGGI, Meerut, searched two firms on 16 Jul 2026 over alleged unauthorised manufacture and operation of unregistered packing machines for pan masala and chewing tobacco. The petitioner was said to manage both firms and was arrested on 17 Jul 2026. The Bench also noted that the arrest memo was digitally signed and uploaded about 45 minutes before the recorded time of arrest.

The petitioners relied on Union of India Vs. Sunil Biyani (2026 INSC 849), where the Supreme Court held, in the context of Section 69 of the CGST Act, that the reasons to believe must be communicated so that the accused can seek anticipatory bail. DGGI argued that Sunil Biyani came after the arrest and applied only prospectively, and relied on the coordinate bench ruling in Jai Kumar Aggarwal Vs. Directorate General of GST Intelligence and three others (2026:AHC:32796-DB).

The Bench rejected the prospectivity argument, holding that a constitutional court’s judgment applies retrospectively unless the court says otherwise, as it “does not legislate or lay down a new law.” It found that Sunil Biyani, decided after Jai Kumar Aggarwal, had changed the position, and that Section 26 is in pari materia with the provisions considered by the Supreme Court.

As the reasons to believe had admittedly never been served on the petitioners, the arrests violated Articles 21 and 22. The Bench added that the district court’s rejection of bail during the petition did not affect the habeas corpus challenge, as the grounds are different.

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