How, why apex court limited the power of arrest in GST act, Customs act

Sub: Polity

Sec: Legislation in news

Context

The Supreme Court, in Radhika Agarwal v. Union of India, ruled that officials under the Customs Act, 1962, and the CGST Act, 2017, exercise powers “analogous” to police officers and must adhere to the restrictions under the CrPC.
The ruling aims to curb the misuse of arrest provisions under these laws.

Supreme Court’s Reasoning

Though officers under the Customs Act and CGST Act are not police officers, they possess powers similar to police, including arrest, search, seizure, and interrogation.
These officers cannot exercise powers beyond that of a police officer in charge of a police station.

Applicability of CrPC

Sections 4 and 5 of the CrPC apply to all laws unless explicitly excluded.
Restrictions imposed on police officers regarding arrests will also apply to officers under the Customs Act and CGST Act.
This includes:
- Presenting an arrested person before a magistrate within 24 hours.
- Informing a family member or friend about the arrest.
- Allowing the arrestee to have an advocate present during interrogation.

Provisions for Arrest under the Customs Act and CGST Act

Customs Act
- Section 104(4): Certain offences (e.g., dealing with prohibited goods, evading duty above ₹50 lakh) are cognizable, allowing arrest without a warrant.
- Section 104(5): All other offences are non-cognizable and require a magistrate’s approval for arrest.
CGST Act
- Section 132 classifies offences as cognizable or non-cognizable based on severity, with corresponding punishments.

Reference to Kejriwal Case (2025)

In Arvind Kejriwal v. Directorate of Enforcement, the SC ruled that an arrest without a warrant under the PMLA must meet strict conditions.
The SC extended the same conditions to arrests under the Customs and CGST Acts.

Safeguards against Arbitrary Arrests

Material in Possession

Arrest can only be made if there is sufficient evidence or material enabling the officer to conclude, with recorded reasons, that the arrestee is guilty.
Officers must consider both incriminating and exonerating materials.

Reasons to Believe

Officers must record in writing their “reasons to believe” that a person is guilty, based on case material.
Reasons must be clear and linked to the case material to avoid arbitrariness.

Providing Grounds of Arrest

The arrested person must be informed of the grounds of arrest, including the reason for belief in their guilt.
This ensures that the arrestee can challenge the arrest or apply for bail.

Misuse of Power of Arrest

The SC acknowledged concerns that taxpayers are coerced into paying dues under the threat of arrest.
The court ruled that coercion for tax recovery is illegal.
Individuals forced to pay under threat can seek a refund.
The Central Board of Indirect Taxes and Customs (CBIC) was directed to frame guidelines to prevent such misuse.