Supreme Court Upholds Constitutional Validity Of "Power To Arrest" Provisions Under Customs Act & GST Acts
The Supreme Court was hearing a Writ Petition along with connected cases concerning the legal controversy on the power to arrest under the Customs Act and GST Act.
The Supreme Court has upheld the Constitutional Validity of the provisions regarding the right of the authorised officers to arrest under the Customs Act, 1962 and the Central Goods and Services Tax Act, 2017 (GST Act).
The Court was dealing with a Writ Petition along with connected cases in which the fountainhead of legal controversy regarding the power to arrest under the aforesaid Statutes arose from a decision of the Apex Court in the case of Om Prakash and Another v. Union of India and Another (2011).
The three-Judge Bench comprising CJI Sanjiv Khanna, Justice M.M. Sundresh, and Justice Bela M. Trivedi held, “… the challenge to the constitutional validity as also the right of the authorised officers under the Customs Act and the 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.”
The Bench reiterated 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.
“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. This settled dictum regarding the interpretation of legislative entries equally applies to the special provision of Article 246-A of the Constitution”, it added.
AOR Gautam Awasthi represented the Petitioner while ASG S.V. Raju represented the Respondents.
Case Background
Before the Om Prakash Judgment, offences under the Customs Act were treated as non-bailable and once arrested, the accused would be detained for a few months before being released on bail. In this Judgment it was observed that the offences under the Customs Act and the Central Excise Act, 1944 were non-cognizable and, therefore, even if the officers had the power to arrest, they could do so only after obtaining a warrant from the Magistrate in terms of Section 416 of the Code of Criminal Procedure, 1973 (CrPC).
It was also held that the offences under the Customs Act and the Excise Act were both bailable, bearing a punishment of less than 3 years. The reasoning in the Om Prakash Judgment proceeds on the interpretation of Sections 49 and 510 of CrPC and holds that Section 155 and other provisions of Chapter XII of CrPC are applicable. The principle being that the customs officers and excise officers, though conferred the power of arrest under the respective enactments, the offences being non-cognizable, were not vested with powers beyond that of a police officer in charge of the police station.
Reasoning
The Supreme Court after hearing the contentions of the counsel, observed, “… given the amendments enacted after Om Prakash (supra) — the 2012 Amendment, the 2013 Amendment, and the 2019 Amendment — certain categories of offences have been carved out and explicitly made cognizable in terms of Section 104(4). Some of the cognizable offences have been made non-bailable in terms of Section 104(6). All other offences under the Customs Act are non-cognizable, unless carved out in Section 104(4), and bailable, as they are excluded in Section 104(6).”
The Court held that Section 41-D of CrPC is applicable for offences under the Customs Act and accordingly, a person arrested by a customs officer has the right to meet an Advocate of his choice during interrogation, but not throughout interrogation.
“In Senior Intelligence Officer, Directorate of Revenue Intelligence v. Jugal Kishore Samra, this Court held that an advocate/authorised person may be present within visual distance during interrogation, but he cannot be within hearing distance of the proceedings nor can there be any consultations with such advocate/authorised person during the course of the interrogation”, it further noted.
The Court, therefore, rejected the challenge to the amendments as well as provisions of the Customs Act and said that the provisions themselves provide enough safeguards against arbitrary and wrongful arrests.
“… 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 the courts and seek a refund of tax deposited by them. The department would also take appropriate action against the officers in such cases”, it also observed.
Furthermore, the Court clarified that a person summoned under Section 70 of the GST Acts is not per se an accused protected under Article 20(3) of the Constitution, because the prohibitive sweep of Article 20(3) does not go back to the stage of interrogation.
“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”, it said.
The Court held that a penalty or prosecution mechanism for the levy and collection of GST, and for checking its evasion, is a permissible exercise of legislative power and 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 levy and collect GST.
The Court, therefore, rejected the challenge to Sections 69 and 70 of the GST Acts.
“In some of the cases, Section 135 of the GST Acts which relates to culpable mental intent has been challenged. We are not examining the said aspect as prosecution has not been initiated in any of these cases. If any person is aggrieved and is advised to challenge the said Section, he/she may do so before the High Court”, it said.
Justice Bela Trivedi's Concurrent Opinion
Justice Bela M. Trivedi in her concurrent opinion remarked, “While completely agreeing with the well-considered opinion expressed by the Hon’ble Chief Justice, on when and how the power of arrest should be exercised by the authorized officers, I have thought it expedient to pen down my views on the jurisdictionary powers of judicial review under Article 32 and Article 226 of the Constitution of India, when the arrest of a person is challenged.”
She emphasised that the power of judicial review in cases of arrest under Special Acts should be exercised very cautiously and in rare circumstances to balance individual liberty with the interest of justice and of the society at large.
“The power of judicial review in cases of arrest under such Special Acts should be exercised very cautiously and in rare circumstances to balance individual liberty with the interest of justice and of the society at large. Any liberal approach in construing the stringent provisions of the Special Acts may frustrate the very purpose and objective of the Acts. would be the society at large and the nation itself”, she added.
She concluded that the powers of judicial review may not be exercised unless there is manifest arbitrariness or gross violation or non-compliance of the statutory safeguards provided under the special Acts, required to be followed by the authorized officers when an arrest is made of a person prima facie guilty of or having committed offence under the special Act.
Accordingly, the Apex Court upheld the validity of the concerned provisions under the Customs Act and GST Act.
Cause Title- Radhika Agarwal v. Union of India and Others (Neutral Citation: 2025 INSC 272)
Appearance:
Petitioner: AORs Gautam Awasthi, Malak Manish Bhatt, Advocates Gautam Khazanchi, Neeha Nagpal, and Samridhi.
Respondents: ASG S.V. Raju, AORs Mukesh Kumar Maroria, G.S. Makker, Karan Bharihoke, Annam Venkatesh, Rajat Mittal, Kanu Agrawal, Malak Manish Bhatt, Ashish Batra, Advocates Sairica Raju, Kanu Agarwal, Zoheb Hossain, Arkaj Kumar, and Vivek Gurnani.
