New Delhi, Feb 27 (UNI) The Supreme Court on Thursday held that arbitrary arrests and coercion by tax authorities violate constitutional rights, and directed that enforcement actions by the officials should remain within the bounds of the law.
While delivering a landmark judgment clarifying the powers of arrest under the Goods and Services Tax (GST) Act and the Customs Act, a bench comprising Chief Justice of India (CJI) Sanjiv Khanna, Justice MM Sundresh, and Justice Bela M Trivedi ruled that officers under these tax laws do not hold the status of police officers, rejecting the argument that they should be treated as such.
The bench held that procedural safeguards under the Code of Criminal Procedure (now Bharatiya Nagarik Suraksha Sanhita) will equally apply to arrests made under these laws.
The top court further held that anticipatory bail provisions apply, allowing individuals to seek relief from the judiciary even before an FIR is registered.
The bench observed that the arrests under GST and Customs laws must be based on “verifiable material,” not mere suspicion.
Officers under these laws are not police officers and cannot exercise similar powers. Circulars issued by the GST department on arrests must be strictly followed.
The court directed that the allegations of coercion in tax payments must be taken seriously; those affected can approach the court for redress.
The SC said citizens should not be harassed due to ambiguities in arrest provisions. and emphasised that there can be no private complaints under the GST Act.
The court applied the principle from the Arvind Kejriwal case, where arrests under the Prevention of Money Laundering Act (PMLA) must be backed by “reasons to believe.” It ruled that the same principle applies to GST and Customs arrests since the relevant legal provisions are nearly identical.
CJI Khanna, while delivering the verdict, stated, “We have held that Deepal Mahajan’s case was different, and we have referred to the Arvind Kejriwal case.”
“Section 132 and 104 of the Customs Act, when specifying offences as cognizable and bailable, should instead be treated as non-cognizable and non-bailable.”
“We have observed that allegations of coercion in tax payments have some merit and that such practices must not be permitted,” he said.
Justice Trivedi, in her concurring judgment, addressed the powers of judicial review under Article 226, reaffirming the court’s stance on upholding constitutional safeguards in tax-related arrests.
The decision was issued in response to 279 petitions challenging the penal provisions of the GST and Customs Acts.
The court’s verdict significantly strengthens legal protections for accused individuals.
The apex judiciary has reinforced that arbitrary arrests and coercion by tax authorities violate constitutional rights, ensuring that enforcement actions remain within the bounds of the law.
The matter has now been listed for further proceedings on March 17.
