The Supreme Court has upheld the constitutional validity of GST Arrest Provisions and held that BNSS/CrPC Protections for Arrested Persons Apply to GST & Customs Acts.
The bench, comprising Chief Justice of India Sanjiv Khanna and Justices MM Sundresh and Bela M Trivedi, underscored that GST officials must strictly adhere to departmental circulars regarding arrests. The Court also dismissed the argument that customs officers function as police officers.
In a landmark judgment, the Supreme Court has reaffirmed the fundamental rights of individuals arrested under the Goods and Services Tax (GST) law in the case of Radhika Agarwal v. Union of India (UOI). The ruling clarifies the legal safeguards available to an arrested person, emphasizing due process, protection against arbitrary detention, and adherence to constitutional principles.
Key Rights Arrested Person Under GST Must Remember
Assessees are compelled to pay tax as a condition for not being arrested
The court while analysing the data noted that the number of people arrested is normally in hundreds or more. However, it is to be noted that the figures with regard to the tax demand and the tax collected would, in fact, indicate some force in the petitioners’ submission that the assessees are compelled to pay tax as a condition for not being arrested.
Sub-section (5) to Section 74 of the GST Acts gives an option to the assessee and does not confer any right on the tax authorities to compel or extract tax by threatening arrest. This would be unacceptable and violative of the rule of law.
Person summoned under Section 70 of the GST Acts is not an accused
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, as has been held in the case of Deepak Mahajan. This is because the prohibitive sweep of Article 20(3) of the Constitution does not go back to the stage of interrogation. Reference in this regard has been placed on Poolpandi and Others v. Superintendent, Central Excise and Others and Dukhishyam Benupani, Asst. Director, Enforcement Directorate (FERA) v. Arun Kumar Bajoria.54 It is obvious that the investigation must be allowed to proceed in accordance with law and there should not be any attempt to dictate the investigator and at the same time, there should not be any misuse of power and authority.
Anticipatory Bail
The court clarified that clarify that the power to grant anticipatory bail arises when there is apprehension of arrest. This power, vested in the courts under the Code, affirms the right to life and liberty under Article 21 of the Constitution to protect persons from being arrested. Thus, in Gurbaksh Singh Sibbia (supra), this Court had held that when a person complains of apprehension of arrest and approaches for an order of protection, such application when based upon facts which are not vague or general allegations, should be considered by the court to evaluate the threat of apprehension and its gravity or seriousness. In appropriate cases, application for anticipatory bail can be allowed, which may also be conditional. It is not essential that the application for anticipatory bail should be moved only after an FIR is filed, as long as facts are clear and there is a reasonable basis for apprehending arrest.
Dept. To offer convincing justification for resorting to coercive measure
The court stated that it might be possible for the department to justify resorting to coercive provisions but the notes on the file must offer convincing justification for resorting to such an extreme measure.
Case Details
Case Title: Radhika Agarwal v. Union of India and Ors.
Case Title: W.P.(Crl.) No. 336/2018 (and connected matters)
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