Final week, the Supreme Courtroom sought to curb the misuse of provisions permitting officers to arrest individuals accused of violating the Customs Act, 1962, and the Central Items and Companies Tax Act, 2017 (CGST Act).
The courtroom dominated in Radhika Agarwal v Union of India that officers below these acts train powers “analogous” to the powers of arrest, search and seizure exercised by police, and have to be certain by the identical restrictions that police officers face below the Code of Prison Process, 1973 (CrPC).
The choice types part of the SC’s ongoing effort to restrict the broad powers of prosecuting businesses below stringent legal guidelines such because the Prevention of Cash Laundering Act, 2002 (PMLA). In one among these circumstances, Arvind Kejriwal v. Directorate of Enforcement (2025), the SC laid down necessities that have to be met earlier than the ED can legally arrest somebody. The SC has successfully transplanted these necessities and held that additionally they apply to officers looking for to make arrests below the Customs Act and the CGST Act.
Exercising police powers
In response to the SC, whereas officers below the Customs Act and CGST Act will not be cops, they “get pleasure from analogous powers corresponding to the ability to analyze, arrest, seize, interrogate, and so forth”. The courtroom stated that these officers can not train powers “past that of a police officer accountable for the police station” and have to be held to the identical procedural requirements as cops.
Detailing how Sections 4 and 5 of the CrPC will apply to different legal guidelines, the courtroom stated that the code will apply “to the extent that there isn’t a opposite provision within the particular act or any particular provision excluding the jurisdiction and applicability of the Code.” Thus, the restrictions that apply to a police officer’s energy to arrest may even apply to a Customs official. These embrace the suitable of an arrested particular person (arrestee) to be introduced earlier than a Justice of the Peace inside 24 hours following an arrest, the duty upon an officer to tell a member of the family or buddy of the arrest, and the suitable of an arrestee to have an advocate current within the neighborhood throughout an interrogation.
Energy of arrest
Beneath Part 104(4) of the Customs Act, some choose offences have been labeled as ‘cognizable,’ corresponding to actions associated to prohibited items or evading customs obligation of over Rs. 50 lakhs. So a customs officer (just like the police) could arrest somebody with no warrant if they’re suspected of one among these offences. Part 104(5) says all different offences below the Customs Act will likely be thought of non-cognizable, and a Justice of the Peace should signal a warrant for arrest and investigation to happen. Equally, Part 132 of the CGST Act classifies sure offences as cognizable and non-cognizable, and offers punishments based mostly on the gravity of the crime.
The SC’s ruling in Kejriwal equally considerations the problem of arrest with no warrant below different particular legal guidelines. Arrested by the ED in reference to the Delhi excise rip-off, Kejriwal argued that his arrest was unlawful earlier than the SC. The courtroom launched him on bail and made a number of observations concerning the ED’s energy to arrest somebody below Part 19 of the PMLA.
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Talking on this determination, the SC recalled, “It was held that the ability to arrest an individual with no warrant and with out instituting a prison case is a drastic and excessive energy. Subsequently, the legislature had prescribed safeguards within the language of Part 19 itself which act as exacting situations as to how and when the ability is exercisable.” These safeguards embrace the possession of supplies by the officer, a “cause to imagine” that an individual is responsible of the alleged offence, and informing the arrestee of the grounds for his or her arrest as quickly as attainable.
The SC in Kejriwal expanded on every of the above. In Radhika Agarwal, the courtroom defined how these necessities additionally apply to different officers. It acknowledged, “We now have cautioned in Arvind Kejriwal (supra) how the unbridled train of the ability to arrest with no warrant may end up in arbitrariness and errors in decision-making course of. An analogous error made by a customs officer can result in a frustration of the constitutional and statutory rights of the arrestee.”
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MATERIAL IN POSSESSION
The courtroom in Kejriwal held that an arrest will be made solely when the proof or the fabric in an officer’s possession “permits them to type an opinion, by recording causes in writing that the arrestee is responsible”. The courtroom additionally clarified that the officer should think about the entire materials within the case and can’t ignore materials that “exonerates” the arrested particular person.
Making use of this ruling to Radhika Agarwal, the courtroom stated customs officers should even have materials of their possession and can’t “conclude that an offence has been dedicated out of skinny air or mere suspicion”.
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REASONS TO BELIEVE
The courtroom in Kejriwal held that the officer should report in writing their “causes to imagine” that an arrestee is responsible of an offence based mostly on the fabric of their possession. Although the courtroom can not study the deserves of those causes, it will possibly see if they’re clearly linked to the case materials. “Doubts will solely come up when the explanations recorded by the authority will not be clear and lucid, and due to this fact a deeper and in-depth scrutiny is required. Arrest, in any case, can’t be made arbitrarily and on the whims and fancies of the authorities,” the courtroom held.
The courtroom held that there was an implicit have to report causes although the Customs Act and CGST Act don’t comprise such a requirement. It justified this based mostly on the power of the acts to categorise offences as cognizable, with the implication that the officer should present reasoning for arresting somebody and the offence they have been arrested for.
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PROVIDING GROUNDS OF ARREST
The courtroom in Kejriwal held that these grounds should embrace the “cause to imagine” that the particular person arrested is responsible in order that the arrestee can successfully problem the arrest or apply for bail in courtroom. With out this info, the courtroom defined that an arrestee can be on the backfoot, missing the required info to file their case. The courtroom in Radhika Agarwal equally dominated that the arrestee have to be supplied with the explanations for his or her arrest.
Misuse of energy of arrest
The courtroom refused to strike down the powers of arrest for CGST and Customs Act officers as sought by the petitioners. Nevertheless, the courtroom did think about knowledge on the variety of GST offence circumstances instituted since 2017, the quantity recovered and the variety of arrests made and held that there’s “some pressure within the petitioners’ submission that the assessees are compelled to pay tax as a situation for not being arrested”.
The courtroom dominated that it was unlawful and impermissible for tax officers to pressure or coerce somebody into paying overdue taxes by threatening them with arrest. To curb such circumstances, it held that people who have been so threatened or coerced “can be entitled to maneuver the courts and search a refund of tax deposited by them. The division would additionally take applicable motion towards the officers in such circumstances.”
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It additionally directs the Central Board of Oblique Taxes and Customs to type pointers to make sure that no taxpayers are threatened with arrest.
