NEW DELHI: Supreme Court ruled Thursday that Customs and GST authorities had the power to carry out arrests but could not do so without adhering to the safeguards provided under the Code of Criminal Procedure (CrPC) for personal liberty of the accused.
Writing the main opinion, CJI Sanjiv Khanna said the safeguards penned in the Arvind Kejriwal vs Enforcement Directorate judgment relating to arrest under Prevention of Money Laundering Act would apply to arrests under Customs and GST Acts. The court introduced safeguards for those facing charges under these Acts.
The SC said officials could not take custody of people for alleged violation of the two laws without informing them of the grounds of arrest and laying out “reasons to believe” that he had committed an offence under these revenue laws. It also said a person who apprehended arrest was entitled to seek anticipatory bail.
A bench of Chief Justice Sanjiv Khanna and Justices M M Sundresh and Bela M Trivedi found force in the argument of the petitioners that assessees were compelled to pay tax as a condition for not being arrested and said this was unacceptable and violative of rule of law.
“We would observe that in case there is a breach of law, and the assessees are put under threat, force or coercion, the assessees would be entitled to move courts and seek a refund of tax deposited by them. The department would also take appropriate action against the officers in such cases,” the bench said.
Importantly, the bench upheld amendments in 2012, 2013 and 2019 to the Customs and GST Acts classifying certain offences as cognisable and non-bailable while rejecting the challenge to their validity by as many as 280 petitions. It also upheld powers of Customs and GST officials to summon an assessee while clarifying that mere summoning did not make the person an accused.
“The challenge to the constitutional validity, as also the right of the authorised officers under Customs and GST Acts to arrest, are rejected and dismissed with elucidation and clarification on the pre-conditions and when and how the power of arrest is to be exercised,” it said.
Reading in the entire arrest procedure under CrPC, along with additional safeguards created by SC judgments, into Customs and GST Acts, the bench said as these two laws didn’t come with complete codes on search and seizure, and arrest, provisions of CrPC would apply unless expressly excluded.
Writing the main opinion, CJI Khanna said safeguards it had penned in the Arvind Kejriwal vs ED judgment relating to arrest under PMLA would apply to arrest procedures under Customs and GST Acts. Customs and GST officials now must follow the following procedure — a. The officer must have material in his possession (to effect arrest); b. Based on such material, the authorised officer should form and record in writing, ‘reasons to believe’ that the person to be arrested is guilty of an offence punishable under the concerned Acts; c. The person arrested, as soon as may be, must be informed of the grounds of arrest — and also the doctrine of proportionality (mere questioning will serve the purpose or is arrest essential).
SC said, “Courts may employ this fourpart doctrinal test in their examination of the legality of arrest as arrest often involves contestation between the fundamental right to life and liberty of individuals against the public purpose of punishing the guilty.” The bench said unbridled exercise of power to arrest without warrant (for cognisable and non-bailable offence, the police must obtain an arrest warrant from court) could result in arbitrariness and errors in decision-making and such errors made by Customs and GST officials could lead to a frustration of constitutional and statutory rights of the arrested person.