SUPREME COURT UPHOLDS THE VALIDITY OF ARREST PROVISIONS UNDER CUSTOM AND GST ACT: RADHIKA AGARWAL VS UNION OF INDIA
REPORTABLE
RADHIKA AGARWAL
Vs
UNION OF INDIA AND OTHERS
(WRIT PETITION (CRIMINAL) NO. 336 OF 2018
DATE OF JUDGMENT-27 FEBRUARY 2025
HEADNOTE-
Custom Act, 1962–Finance Act, 2013–Finance Act, 2019–Section 104(4) and 104(6)–CGST Act, 2017–Section 69, 70, and 132–HELD– The challenge to the constitutional validity as also the right of the authorised officers under the Customs Act and the GST Acts to arrest are rejected and dismissed with elucidation and clarification on the pre-conditions and when and how the power of arrest is to be exercised.
ISSUE FOR CONSIDERATION-
The Writ Petition challenges the constitutional validity and the right of the authorized officers to arrest under CGST Act, 2017 and the Customs Act, 1962.
IMPORTANT PARAGRAPHS-
PARA 2. The fountainhead of legal controversy regarding the power to arrest under the Customs Act, 1962 and the Central Goods and Services Tax Act, 2017, stems from the decision of a three Judge Bench of this Court in Om Prakash and Another v. Union of India & Another. Before this decision, offences under the Customs Act were treated as non-bailable and once arrested, the accused would be detained for a few months before being released on bail. Om Prakash (supra) observed that the offences under the Customs Act and the Central Excise Act, 1944 were non-cognizable and, therefore, even if the officers had the power to arrest, they could do so only after obtaining a warrant from the Magistrate in terms of Section 416 of the Code of Criminal Procedure, 1973. It was also held that offences under the Customs Act and the Excise Act were both bailable, bearing a punishment of less than 3 years.
PARA 3. The reasoning in Om Prakash (supra) proceeds on the interpretation of Sections 49 and 510 of the Code and holds that Section 155 and other provisions of Chapter XII of the Code are applicable. The principle being that the customs officers and excise officers, though conferred the power of arrest under the respective enactments, the offences being non-cognizable, were not vested with powers beyond that of a police officer in charge of the police station.
PARA 4. on various grounds. For the following reasons, we are not inclined to go into all the issues:
- First, the decision in Om Prakash (supra) was pronounced on 30.09.2011 and held the field for more than 12 years.
- Secondly, and more significantly, it is apparent that the legislature has accepted the ratio of the said decision and made specific amendments to the Customs Act. The ratio is equally given effect to and incorporated in the GST Act.
- Thirdly, the ratio in Om Prakash (supra) promotes and protects the life and liberty of citizens and, corrects earlier prevalent wrongdoings which diminished the constitutional and statutory rights of citizens.
However, we would refer to certain portions of Om Prakash (supra) in the context of the present litigation to interpret relevant provisions of the Customs Act and the GST Act.
JUDGMENT:-
PARA 4. Whenever the jurisdiction of the High Court or the Supreme Court is invoked under Article 226 or Article 32 as the case may be, challenging the punitive or preventive detention, the Court is expected to take into consideration the nature of right infringed, the scope and object of the legislation under which such arrest or detention is made, the need to balance the rights and interests of the individual as against those of the society, the circumstances under which and the persons by whom the jurisdiction is invoked etc. In exercise of their discretionary jurisdiction, the High Courts and the Supreme Court do not, as courts of appeal or revision, correct errors of law or of facts. The judicial intervention is warranted only in exceptional circumstances when the arrest is prima facie found to be malafide; or is prompted by extraneous circumstances, or is made in contravention of or in breach of provisions of the concerned statute; or when the authority acting under the concerned statute does not have the requisite authority etc.
PARA 9. Special Acts like PMLA, UAPA, Foreign Exchange, Customs Act, GST Acts, etc. is challenged, the Court should be extremely loath in exercising its power of judicial review. In such cases, the exercise of the power should be confined only to see whether the statutory and constitutional safeguards are properly complied with or not, namely to ascertain whether the officer was an authorized officer under the Act, whether the reason to believe that the person was guilty of the offence under the Act, was based on the “material” in possession of the authorized officer or not, and whether the arrestee was informed about the grounds of arrest as soon as may be after the arrest was made. Sufficiency or adequacy of material on the basis of which the belief is formed by the officer, or the correctness of the facts on the basis of which such belief is formed to arrest the person, could not be a matter of judicial review.
PARA 10. It hardly needs to be reiterated that the power of judicial review over the subjective satisfaction or opinion of the statutory authority would have different facets depending on the facts and circumstances of each case. The criteria or parameters of judicial review over the subjective satisfaction applicable in Service related cases, cannot be made applicable to the cases of arrest made under the Special Acts. The scrutiny on the subjective opinion or satisfaction of the authorized officer to arrest the person could not be a matter of judicial review, in as much as when the arrest is made by the authorized officer on he having been satisfied about the alleged commission of the offences under the special Act, the matter would be at a very nascent stage of the investigation or inquiry. The very use of the phrase “reasons to believe” implies that the officer should have formed a prima facie opinion or belief on the basis of the material in his possession that the person is guilty or has committed the offence under the relevant special Act. Sufficiency or adequacy of the material on the basis of which such belief is formed by the authorized officer, would not be a matter of scrutiny by the Courts at such a nascent stage of inquiry or investigation.
