Arrest Powers Under Customs Act and GST Acts:
-- The Supreme Court upheld the constitutional validity of arrest provisions under the Customs Act, 1962 and the GST Acts.
-- The Court emphasized that arrest powers must be exercised with strict adherence to statutory safeguards to protect individual liberty.
-- Section 104 of the Customs Act and Section 69 of the GST Acts provide the authority to arrest, but only when the officer has "reasons to believe" that an offence has been committed.
-- The Court clarified that the "reasons to believe" must be based on credible material and must be recorded in writing.
-- The grounds of arrest must be communicated to the arrestee in writing at the time of arrest, as per Article 22(1) of the Constitution. (Paras 30-47, 60)
Judicial Review of Arrests:
-- The Court held that judicial review of arrests under special statutes like the Customs Act and GST Acts should be limited to ensuring compliance with statutory safeguards.
-- The sufficiency of material or the correctness of facts forming the basis of arrest is not subject to judicial review at the initial stage.
-- The Court reiterated that Article 21 and Article 22 of the Constitution protect the right to life and personal liberty, but permit deprivation of liberty if done according to the procedure established by law. (Paras 65-77)
Safeguards Against Arbitrary Arrest:
-- The Court outlined pre-conditions for arrest, including the requirement of material evidence, recording of reasons to believe, and communication of grounds of arrest.
-- The Court emphasized that arrest should not be routine and must be based on objective facts and credible information.
-- The doctrine of proportionality was applied to ensure that arrests are made only when necessary and justified. (Paras 30-47, 60)
Compounding of Offences and Voluntary Payments:
-- The Court rejected the argument that compounding of offences under the GST Acts requires a prior assessment order.
-- The Court clarified that voluntary payments of tax liability by taxpayers should not be made under coercion or threat of arrest.
-- The Court directed the Central Board of Indirect Taxes and Customs (CBIC) to issue guidelines to prevent coercive recovery of taxes. (Paras 63-68)
Legislative Competence:
-- The Court upheld the legislative competence of Parliament to enact provisions for arrest and prosecution under the GST Acts, as these powers are ancillary to the power to levy and collect GST under Article 246-A of the Constitution.
-- The Court rejected the challenge to the vires of Sections 69 and 70 of the GST Acts, holding that these provisions are constitutionally valid. (Paras 72-75)
The Court upheld the constitutional validity of the arrest provisions under the Customs Act and GST Acts. The Court reiterated the importance of statutory safeguards and judicial review to prevent arbitrary arrests. The Court directed the CBIC to issue guidelines to prevent coercive recovery of taxes. The Court rejected the challenge to the legislative competence of Parliament under Article 246-A.
Constitution of India (COI): Articles 21, 22, 32, 226, 246-A.
Code of Criminal Procedure, 1973 (CrPC): Sections 41, 41-B, 41-D, 50-A, 55-A, 155, 167, 172.
Indian Penal Code, 1860 (IPC): Section 26.
Customs Act, 1962: Sections 104, 132, 133, 135, 135-A, 136.
Central Goods and Services Tax Act, 2017 (CGST Act): Sections 69, 70, 132, 73, 74.
Prevention of Money Laundering Act, 2002 (PMLA): Section 19.
Arrest powers, Customs Act, GST Acts, judicial review, safeguards, reasons to believe, grounds of arrest, legislative competence, Article 21, Article 22, Article 246-A, voluntary payments, compounding of offences, proportionality.
Nature of the Litigation:
-- The case involved multiple writ petitions and criminal appeals challenging the arrest powers under the Customs Act, 1962 and the GST Acts.
-- Petitioners argued that the arrest provisions were arbitrary and violative of fundamental rights under Articles 21 and 22 of the Constitution.
Remedy Sought:
-- Petitioners sought declaration that the arrest provisions under the Customs Act and GST Acts were unconstitutional.
-- They also sought guidelines to prevent arbitrary arrests and coercive recovery of taxes.
Reason for Filing:
-- Petitioners alleged that arrests were being made without sufficient material and that taxpayers were being coerced into making voluntary payments of tax liabilities under threat of arrest.
Previous Decisions:
-- The Court referred to its earlier decisions in Om Prakash v. Union of India (2011), Deepak Mahajan v. Directorate of Enforcement (1994), and Arvind Kejriwal v. Directorate of Enforcement (2025) to interpret the arrest provisions and safeguards.
Whether the arrest provisions under the Customs Act and GST Acts are constitutionally valid?
Whether the safeguards provided under these Acts are sufficient to prevent arbitrary arrests?
Whether judicial review of arrests under these Acts should extend to the sufficiency of material or correctness of facts?
Whether voluntary payments of tax liabilities can be made under coercion or threat of arrest?
Whether the legislative competence of Parliament to enact arrest provisions under the GST Acts is valid under Article 246-A of the Constitution?
Petitioners:
-- Argued that the arrest provisions were arbitrary and violative of fundamental rights.
-- Contended that voluntary payments were being made under coercion and threat of arrest.
-- Challenged the legislative competence of Parliament to enact arrest provisions under the GST Acts.
Respondents:
-- Defended the arrest provisions as necessary for effective enforcement of tax laws.
-- Argued that the safeguards provided under the Acts were sufficient to prevent misuse of arrest powers.
-- Contended that voluntary payments were made by taxpayers without coercion.
Arrest powers under the Customs Act and GST Acts must be exercised with strict adherence to statutory safeguards, including the requirement of material evidence, recording of reasons to believe, and communication of grounds of arrest.
Judicial review of arrests under these Acts should be limited to ensuring compliance with statutory safeguards and should not extend to the sufficiency of material or correctness of facts.
Voluntary payments of tax liabilities should not be made under coercion or threat of arrest, and the CBIC must issue guidelines to prevent such practices.
The legislative competence of Parliament to enact arrest provisions under the GST Acts is valid under Article 246-A of the Constitution.
Case Title: RADHIKA AGARWAL VERSUS UNION OF INDIA AND OTHERS
Citation: 2025 LawText (SC) (2) 276
Case Number: WRIT PETITION (CRIMINAL) NO.336 OF 2018 W I T H OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.1534 OF 2018) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.2971 OF 2018) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.4078 OF 2018) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.7408 OF 2018) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.11049 OF 2018) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.244 OF 2019) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.3647 OF 2019) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.5153 OF 2019) W.P.(Crl.) No.336 of 2018 & Connected matters Page 1 of 63 CRIMINAL APPEAL NOS. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NOS.4322-4324 OF 2019) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.4546 OF 2019) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO. 9541 OF 2019) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.3366 OF 2020) CIVIL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO.20310 OF 2021) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.6660 OF 2020) WRIT PETITION (CRIMINAL) NO.6 OF 2021 WRIT PETITION (CRIMINAL) NO.40 OF 2021 WRIT PETITION (CRIMINAL) NO.47 OF 2021 CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.1031 OF 2021) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.1107 OF 2021) WRIT PETITION (CRIMINAL) NO.144 OF 2021 WRIT PETITION (CRIMINAL) NO.445 OF 2023 WRIT PETITION (CRIMINAL) NO.585 OF 2023 CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.11839 OF 2019) TRANSFERRED CASE (CRIMINAL) NO.5 OF 2018 WRIT PETITION (CRIMINAL) NO.118 OF 2019 WRIT PETITION (CRIMINAL) NO.119 OF 2019 CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.6834 OF 2019) WRIT PETITION (CRIMINAL) NO.212 OF 2019 WRIT PETITION (CRIMINAL) NO.239 OF 2019 WRIT PETITION (CRIMINAL) NO.253 OF 2019 W.P.(Crl.) 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OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.5536 OF 2020) WRIT PETITION (CRIMINAL) NO.380 OF 2020 CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.6172 OF 2020) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.6303 OF 2020) WRIT PETITION (CIVIL) NO.1401 OF 2020 WRIT PETITION (CRIMINAL) NO.411 OF 2020 WRIT PETITION (CRIMINAL) NO.410 OF 2020 WRIT PETITION (CRIMINAL) NO.4 OF 2021 WRIT PETITION (CIVIL) NO.56 OF 2021 WRIT PETITION (CRIMINAL) NO.33 OF 2021 CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.1073 OF 2021) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NO.1072 OF 2021) CRIMINAL APPEAL NO. OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (CRIMINAL) NOS.2050-2054 OF 2021) W.P.(Crl.) No.336 of 2018 & Connected matters Page 4 of 63 WRIT PETITION (CRIMINAL) NO.301 OF 2021 CRIMINAL APPEAL NO. 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No.336 of 2018 WRIT PETITION (CRIMINAL) NO.210 OF 2024 AND WRIT PETITION (CRIMINAL) NO.198 OF 2024
Date of Decision: 2025-02-27
