In a landmark judgment, a Supreme Court Bench comprising Chief Justice of India Sanjiv Khanna, along with Justice M.M. Sundresh and Justice Bela M. Trivedi, ruled that arrests under the Goods and Services Tax (GST) Act cannot be made solely for the purpose of investigating potential cognizable and non-bailable offences. The Court emphasized that such arrests must be backed by substantive evidence and procedural safeguards.
Case Background
The case, Radhika Agarwal vs Union of India (W.P.(Crl.) No.336 of 2018), emerged from a series of petitions challenging the powers of arrest under the GST and Customs Acts. Petitioner Radhika Agarwal, along with other business entities, contended that investigating agencies, particularly the Enforcement Directorate (ED), were misusing their arrest powers without due legal process. The petitioners cited the Supreme Court’s earlier decision in Om Prakash v. Union of India (2011), which had classified offences under the Customs Act as non-cognizable and bailable, but subsequent amendments had altered this legal landscape.
Important Legal Issues
The Supreme Court deliberated on the following key legal questions:
– Whether authorities could arrest individuals under the GST and Customs Acts solely based on suspicion of a cognizable offence.
– Whether the amendments to the Customs and GST Acts, which classified specific offences as cognizable and non-bailable, effectively overruled the Om Prakash judgment.
– Whether GST and customs officers could be equated with police officers under the Code of Criminal Procedure (CrPC) and thus required to follow similar procedural safeguards.
– The extent to which such powers impacted fundamental rights under the Constitution, particularly Articles 21 and 22.
Important Observations of the Court
The Supreme Court made several notable observations regarding these legal issues:
“The power to arrest must not be wielded as a tool of coercion or intimidation but as a necessary step backed by substantive evidence.”
“Merely classifying an offence as cognizable and non-bailable does not grant unchecked authority to arrest. Due process must be followed, ensuring compliance with constitutional safeguards.”
“The presumption of innocence is a fundamental tenet of criminal jurisprudence, and arrests should not be made preemptively or to facilitate an investigation.”
“Fundamental rights enshrined in the Constitution cannot be bypassed under the guise of economic offences. The courts must act as a safeguard against arbitrary detentions.”
“The legislature may define certain offences as non-bailable, but this does not absolve enforcement agencies from adhering to principles of fairness, proportionality, and necessity when making arrests.”
“The power of arrest is not an investigative tool; it is a measure to ensure the presence of an accused during trial. Any deviation from this principle amounts to a violation of constitutional rights.”
Decision of the Court
The Supreme Court ruled that:
– Arrests must be based on substantive evidence, not mere suspicion: The Court reiterated that GST and customs officers must have concrete grounds before detaining any individual.
– Procedural safeguards under CrPC apply: Officers must comply with CrPC provisions, including seeking prior judicial approval in cases of non-cognizable offences.
– Om Prakash remains valid: The Court upheld the principles established in Om Prakash v. Union of India, affirming that arbitrary arrests violate Article 21 of the Constitution.
– Judicial oversight is essential: Individuals arrested under GST and Customs laws must be presented before a Magistrate within 24 hours, as per CrPC provisions.
