Context:
Recently, the Supreme Court sought to restrict the misuse of a provision that allows officials to arrest individuals accused of violating the Customs Act, 1962 and the Central Goods and Services Tax Act, 2017 (CGST Act).
Supreme Court’s Ruling:
In this case: Radhika Agarwal v Union of India,
- The court ruled that officials under Customs and CGST acts have powers “analogous” to those of the police, including arrest, search, and seizure.
- These officers must follow the same restrictions as police officials face the Code of Criminal Procedure, 1973 (CrPC).
- The decision is part of the SC’s broader effort to limit the expansive powers of prosecuting agencies under stringent laws such as the Prevention of Money Laundering Act, 2002 (PMLA).
In previous case: Arvind Kejriwal v. Directorate of Enforcement (2025)
- In this case, the SC had already laid down strict requirements for the ED before they could arrest someone.
- The court has now extended these requirements to official making arrests under the Customs Act and the CGST Act.
The Court ruled that such coercion is illegal, and individuals forced to pay taxes under threat of arrest are entitled to a refund.
The SC directed the Central Board of Indirect Taxes and Customs to form guidelines to ensure that no taxpayers are threatened with arrest.
The Court ruled that customs officers must record their “reasons to believe” that an individual is guilty before making an arrest, ensuring the arrestee can challenge it and apply for bai.
Key restriction on Arrest under CrPC
The court explained that Sections 4 and 5 of the CrPC will apply to other laws. Specifically, restrictions on police powers to arrest also applicable to Customs officials. These rules include:
- The arrested person must be brought before a magistrate within 24 hours.
- The officer must inform a family member or friend of the arrest.
- The arrested person has the right to have a lawyer nearby during questioning.
Relevant SC Judgements
Om Prakash v. Union of India (2011):
- 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.
- In this case, the court held that the offences under the Customs Act and the Central Excise Act, 1944 are non-cognizable and bailable, with a maximum punishment of less than 3 years.
Arvind Kejriwal v Directorate of Enforcement (2025):
- The SC noted that the power to arrest without a warrant is drastic and extreme. Therefore, section 19 of the PMLA includes safeguards that regulate its exercise:
- These safeguards require officers to have sufficient material evidence, form a written opinion, and ensure that arrest is based on well-founded reasons, allowing the person to challenge the arrest or apply for bail.