Context : The Supreme Court ruled that Customs and GST officers cannot arrest individuals arbitrarily and must meet a higher threshold before doing so.
Relevance : GS 2(Polity , Governance)
- ‘Reason to Believe’ vs. Suspicion: Unlike police officers who can arrest on suspicion, Customs and GST officers need sufficient cause to “reason to believe” an offence has been committed.
- Stringent Standard: The court clarified that “reason to believe” is more stringent than the mere suspicion standard under Section 41 of the CrPC.
- Extreme Power: The Bench emphasized that arrest without a warrant is a “drastic and extreme power” that must be exercised cautiously.
- Reference to ED & PMLA: Customs and GST officers are expected to adhere to similar standards as Enforcement Directorate (ED) officers under PMLA while arresting individuals.
- Concerns on Misuse: The court highlighted instances where assessees were allegedly forced to pay taxes to avoid arrest, deeming such practices unlawful.
- Legal Clarity: The GST Acts provide an option for assessees to pay tax but do not give authorities the right to compel or extract tax through arrest threats.
- Recent SC Precedents: The ruling aligns with recent SC judgments, including the one involving Arvind Kejriwal’s arrest in the liquor policy case.
Implications:
- Stronger Legal Protections: Taxpayers get greater protection from coercive actions by tax authorities.
- Checks on Tax Authorities: Customs and GST officials must now demonstrate substantial grounds before making arrests.
- Potential Reduction in Misuse: Limits the possibility of harassment and forced tax recoveries under the guise of arrests.
- Aligns with Due Process: Reinforces the constitutional safeguards against arbitrary detentions.
