In a landmark decision on Thursday (February 27, 2025), the Supreme Court clarified the arrest powers under the GST Act and the Customs Act. The court ruled that the rights of arrested individuals, as outlined in the Code of Criminal Procedure (now replaced by the Bharatiya Nagarik Suraksha Sanhita), apply fully to arrests made under both the Customs Act and the GST Act. This includes the right to seek anticipatory bail, enabling individuals to approach the court for protection even before an FIR is filed if they fear arrest.
The court also addressed concerns about coercion and harassment in tax collection, noting some validity in these claims. Chief Justice of India Sanjiv Khanna, while delivering the verdict, emphasized, “If someone is willing to pay, they can seek relief from a writ court. We’ve made it clear that coercion is unacceptable.” The ruling further mandated strict compliance with arrest-related circulars issued by the GST department and dismissed the notion that customs officers hold the same authority as police officers.
This judgment came from a bench comprising Chief Justice Sanjiv Khanna, Justices MM Sundresh, and Bela M Trivedi, resolving 279 petitions that challenged the compatibility of penal provisions in the Customs Act, CGST/SGST Act, and similar laws with the CrPC and the Constitution. The court had reserved its orders on May 16, 2024. During the hearings, the bench made several notable observations: private complaints are not permissible under the GST Act; arrests cannot be based solely on suspicion; officers must possess verifiable material before making an arrest, subject to a magistrate’s scrutiny; recent legislative amendments partially modified the precedent set by Om Prakash v. Union of India (2011) but did not overturn it entirely; and citizens must not face harassment due to vague arrest provisions.
Expressing concern over ambiguities in Section 69 of the GST Act (which governs arrest powers), the court signalled its intent to interpret the law in favor of strengthening individual liberty while preventing harassment. At one point, CJI Khanna remarked that the laws in question limit arrest powers, stating, “We often assume an investigation requires an arrest to be complete, but that’s not the legislation’s intent. It curbs the power to arrest.” The court also distinguished between an officer’s “power to arrest” and the “necessity of arrest,” underscoring a restrained approach to such actions.
Detailed Judgement is coming soon!
SC – Radhika Agarwal v. Union of India and Ors., [W.P.(Crl.) No. 336/2018 (and connected matters)]
