SC Ruling on Arrest Powers of Custom Officials, GST Officials

March 5, 2025

The Supreme Court of India has recently made decisions regarding the arrest powers of officials under the Customs Act, 1962, and the Central Goods and Services Tax Act, 2017. In the case of Radhika Agarwal v Union of India, the court sought to limit the misuse of these powers.

Context of the Ruling

This ruling aligns with the court’s ongoing efforts to regulate the extensive authority of prosecuting agencies under stringent laws like the Prevention of Money Laundering Act, 2002. The court brought into light that officials under the Customs Act and CGST Act possess powers similar to those of police officers. Consequently, they must adhere to the same restrictions imposed on police under the Code of Criminal Procedure, 1973.

Key Aspects of the Ruling

The court’s decision emphasised that customs and GST officials cannot exercise powers beyond those of a police officer. This includes the requirement to present an arrested person before a magistrate within 24 hours. Additionally, officers must inform a family member of the arrest and allow the arrestee access to legal counsel during interrogation.

Cognizable and Non-Cognizable Offences

Under Section 104 of the Customs Act, certain offences are classified as cognizable, allowing for arrest without a warrant. Other offences are deemed non-cognizable, requiring a magistrate’s approval for arrest. A similar classification exists under Section 132 of the CGST Act.

Requirements for Arrest

The court specified that an arrest can only occur when officers possess sufficient evidence. They must record their reasons for believing the arrestee is guilty based on the material in their possession. This requirement aims to prevent arbitrary arrests and ensure accountability.

Grounds for Arrest

Arresting officers must provide clear grounds for the arrest, including the rationale behind the belief of guilt. This transparency allows the arrestee to challenge their arrest effectively. The ruling mandates that arrestees receive this information promptly.

Addressing Misuse of Powers

The court did not eliminate the arrest powers of customs and GST officials but acknowledged concerns about their potential misuse. It brought into light that coercing individuals into paying taxes under the threat of arrest is illegal. The court directed the Central Board of Indirect Taxes and Customs to establish guidelines to prevent such abuses.

Implications of the Ruling

This ruling is important step in safeguarding the rights of individuals against arbitrary arrest. It aims to ensure that officials operate within the bounds of the law, thereby enhancing accountability in the enforcement of tax laws.

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