New Delhi, Feb 27 (KNN) In a landmark ruling, the Supreme Court has held that the rights of accused persons under the Code of Criminal Procedure (now Bharatiya Nagarik Suraksha Sanhita) apply equally to arrests made under the Goods and Services Tax (GST) Act and the Customs Act.
The Court emphasised that arresting authorities must adhere strictly to legal safeguards, preventing arbitrary detentions.
Applying the principles from the Arvind Kejriwal case, the Court stated that an arrest under GST and Customs laws must be based on “reasons to believe” rather than mere suspicion.
It noted that Section 19(1) of the Prevention of Money Laundering Act (PMLA) and Section 104 of the Customs Act, which govern arrest powers, are virtually identical. The same reasoning extends to the arrest provision under the GST Act.
The Court further ruled that anticipatory bail provisions are applicable under the GST and Customs Acts, allowing individuals to seek legal protection even before an FIR is registered.
Additionally, it mandated that circulars issued by the GST department regarding arrests must be strictly followed.
Highlighting concerns over coercion and harassment by tax officials, the Court observed that officers engaging in such practices must be dealt with through departmental action.
“Wherever a person is disposed to pay under coercion, they have the right to approach the writ court,” stated Chief Justice of India Sanjiv Khanna while delivering the verdict.
A bench comprising CJI Sanjiv Khanna, Justices MM Sundresh, and Bela M Trivedi issued the ruling while deciding on 279 petitions challenging the penal provisions of the Customs Act and GST laws. Justice Trivedi’s concurring judgment also examined the powers of judicial review.
The Court clarified key points, including that (i) there can be no private complaints under the GST Act, (ii) arrests should not be made on mere suspicion, and (iii) officers must have verifiable material before making arrests.
Expressing concerns over ambiguity in the GST Act’s arrest provisions, the Court asserted that laws should safeguard individual liberty and prevent harassment. FISME has consistently highlighted the challenges faced by MSMEs under the GST framework.
(KNN Bureau)
