The Supreme Court Yesterday (Feb 27) ruled that authorized officers can legally arrest under the GST & Customs Act, rejecting challenges to their powers. The judgment clarifies arrest conditions, legal safeguards, and enforcement rights against tax evasion.
Thank you for reading this post, don't forget to subscribe!
NEW DELHI: The Supreme Court of India ruled that the power of authorized officers to arrest under the Customs Act, 1962, and the Goods and Services Tax (GST) Act, 2017, is constitutional and valid.
The case was based on a legal dispute arising from the Om Prakash and Another v. Union of India and Another (2011) judgment.
A three-judge bench of Chief Justice of India (CJI) Sanjiv Khanna, Justice M.M. Sundresh, and Justice Bela M. Trivedi stated:
“… 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.”
The Top Court, in Radhika Agarwal v. Union of India & Others (2025 INSC 272), delivered a landmark judgment concerning the power of arrest under the Customs Act, 1962, and the Central Goods and Services Tax (GST) Act, 2017.
The case primarily addresses whether customs officers have the authority to arrest individuals without a warrant and the constitutional safeguards surrounding such arrests.
ALSO READ: Supreme Court’s Landmark Ruling | ‘Equal Rights in GST & Customs Arrests’: CJI Khanna
The judgment extensively discusses past precedents, amendments to the law, and procedural requirements that customs and GST officers must follow before making an arrest.
The ruling clarifies the classification of offences under the Customs Act, the extent of power available to customs officers, and the procedural safeguards necessary to protect individual rights.
Key Legal Issues Addressed
A. Are Customs Officers ‘Police Officers’?
A key argument made by the petitioners was that customs officers should be treated as “police officers”. This classification would mean that statements recorded before customs officers would be inadmissible under Section 25 of the Evidence Act (which disallows confessions made to police officers from being used as evidence).
However, the Supreme Court rejected this argument, citing earlier precedents:
- State of Punjab v. Barkat Ram (1962)
- Ramesh Chandra Mehta v. State of West Bengal (1969)
- Illias v. Collector of Customs (1969)
- Tofan Singh v. State of Tamil Nadu (2021)
These rulings confirmed that customs officers are not police officers since they do not have general law enforcement powers like the police. Instead, they act as “revenue officers” enforcing tax laws.
Impact of This Ruling
Since customs officers are not considered police officers:
- Confessions made before them are admissible as evidence.
- They do not need to follow all procedures applicable to police investigations, but they must comply with constitutional safeguards on arrests.
B. Are Offences Under the Customs Act and GST Act Cognizable or Non-Cognizable?
The judgment analyzed amendments made to Section 104 of the Customs Act, which classifies offences as cognizable or non-cognizable and bailable or non-bailable.
Key Amendments
- 2012 Amendment: Made evasion of duty exceeding ₹50 lakh and certain other offences cognizable and non-bailable.
- 2013 Amendment: Extended non-bailable status to additional offences.
- 2019 Amendment: Expanded cognizable offences to include fraudulent claims for duty exemptions and misuse of trade instruments.
Final Classification of Offences
| Type of Offence | Cognizable/Non-Cognizable | Bailable/Non-Bailable |
|---|---|---|
| Evasion of duty exceeding Rs 50 lakh | Cognizable | Non-bailable |
| Smuggling of prohibited goods | Cognizable | Non-bailable |
| Fraudulent tax exemptions/drawbacks exceeding Rs 50 lakh | Cognizable | Non-bailable |
| Other Customs Act violations | Non-Cognizable | Bailable |
Court’s Ruling
- The Court upheld these amendments and held that only the specified offences in Section 104(4) are cognizable and non-bailable.
- All other offences under the Customs Act remain non-cognizable and bailable.
ALSO READ: Supreme Court Recalls Order in MLA Abbas Ansari Case | Big Twist in Gangsters Act Probe
C. Procedural Safeguards for Arrests
The Court strongly emphasized constitutional safeguards to prevent misuse of arrest powers. It referred to past rulings such as D.K. Basu v. State of West Bengal (1997) and Arvind Kejriwal v. Directorate of Enforcement (2025) to outline key procedural requirements.
1. Arrests Must Be Based on ‘Reasons to Believe’
- Before making an arrest, the customs officer must have “reasons to believe” (recorded in writing) that the person has committed a cognizable offence.
- These “reasons to believe” must be shared with the accused to allow them to challenge the arrest.
2. Compliance with CrPC and Constitutional Protections
The Court extended several CrPC protections to arrests under the Customs Act, including:
- Section 41-B: Officers must wear visible identification and prepare an arrest memorandum signed by a witness and the accused.
- Section 41-D: The accused has the right to meet an advocate during interrogation, though not throughout the interrogation.
- Section 50-A: The arrested person must be allowed to inform a friend or relative about their arrest.
- Section 55-A: Authorities must take reasonable care of the accused’s health and safety.
3. Right to Judicial Review of Arrests
- The Supreme Court held that courts have the power to review arrests and strike down illegal detentions.
- Arrests must be made based on admissible evidence, and the officer must consider all relevant material, including evidence that may favor the accused.
Implications of the Judgment
A. Protection Against Arbitrary Arrests
- Customs and GST officers now have clear procedural guidelines to follow before making arrests.
- Individuals can challenge their arrest if proper procedures are not followed.
B. Clarity on the Cognizability of Offences
- Only specific high-value tax evasion and smuggling cases are now cognizable and non-bailable.
- Other customs violations remain non-cognizable and bailable.
C. Strengthening the Rights of the Accused
- The ruling ensures that arrestees are informed of their rights and provided legal representation.
- It prevents excessive use of arrest powers by customs officers, ensuring compliance with constitutional guarantees.
Key Takeaways from the Judgment
Legislative Powers Should Be Read Broadly
The Supreme Court emphasized that when interpreting legislative powers, they should not be seen in a narrow way. Instead, they should be understood in the broadest possible sense to ensure proper functioning of the government.
The Bench stated:
“The ambit of an entry or article laying down the legislative field extends to all ancillary and subsidiary matters which fairly and reasonably can be said to be comprehended in it. This settled dictum regarding the interpretation of legislative entries equally applies to the special provision of Article 246-A of the Constitution.”
Why Did the Supreme Court Reject This Interpretation?
The Supreme Court reconsidered this issue after several amendments to the law in 2012, 2013, and 2019. These amendments:
- Made certain offenses cognizable under Section 104(4) of the Customs Act.
- Made some cognizable offenses non-bailable under Section 104(6).
- Clarified that all other offenses remain non-cognizable and bailable unless specified in Section 104(4) and 104(6).
The Supreme Court stated:
“… given the amendments enacted after Om Prakash (supra) — the 2012 Amendment, the 2013 Amendment, and the 2019 Amendment — certain categories of offences have been carved out and explicitly made cognizable in terms of Section 104(4). Some of the cognizable offences have been made non-bailable in terms of Section 104(6). All other offences under the Customs Act are non-cognizable, unless carved out in Section 104(4), and bailable, as they are excluded in Section 104(6).”
The Court also ruled that Section 41-D of CrPC applies to Customs Act cases, meaning that:
- A person arrested by a customs officer has the right to meet a lawyer during interrogation.
- However, the lawyer cannot be present during the entire questioning process.
It cited a previous ruling:
“In Senior Intelligence Officer, Directorate of Revenue Intelligence v. Jugal Kishore Samra, this Court held that an advocate/authorised person may be present within visual distance during interrogation, but he cannot be within hearing distance of the proceedings nor can there be any consultations with such advocate/authorised person during the course of the interrogation.”
Thus, the Court upheld the amendments and provisions of the Customs Act, stating that they include safeguards against arbitrary and wrongful arrests.
The Court further noted:
“… in case there is a breach of law, and the assessees are put under threat, force or coercion, the assessees would be entitled to move the courts and seek a refund of tax deposited by them. The department would also take appropriate action against the officers in such cases.”
How Does This Affect GST Arrest Powers?
The Court clarified that a person summoned under Section 70 of the GST Acts is not automatically considered an accused under Article 20(3) of the Constitution.
The ruling stated:
“The Parliament, under Article 246-A of the Constitution, has the power to make laws regarding GST and, as a necessary corollary, enact provisions against tax evasion. Article 246-A of the Constitution is a comprehensive provision and the doctrine of pith and substance applies. The impugned provisions lay down the power to summon and arrest, powers necessary for the effective levy and collection of GST.”
The Court held that:
- Sections 69 and 70 of the GST Act are constitutional.
- Provisions allowing arrest, summons, and prosecution under GST laws are valid and necessary to prevent tax evasion.
It also addressed concerns regarding Section 135 of the GST Act, stating:
“In some of the cases, Section 135 of the GST Acts which relates to culpable mental intent has been challenged. We are not examining the said aspect as prosecution has not been initiated in any of these cases. If any person is aggrieved and is advised to challenge the said Section, he/she may do so before the High Court.”
Justice Bela Trivedi’s Opinion on Judicial Review
Justice Bela M. Trivedi, in her separate but concurring opinion, agreed with the Chief Justice’s views on arrest powers.
She observed:
“While completely agreeing with the well-considered opinion expressed by the Hon’ble Chief Justice, on when and how the power of arrest should be exercised by the authorized officers, I have thought it expedient to pen down my views on the jurisdictionary powers of judicial review under Article 32 and Article 226 of the Constitution of India, when the arrest of a person is challenged.”
She warned that judicial review of arrests under Special Acts should be done cautiously.
“The power of judicial review in cases of arrest under such Special Acts should be exercised very cautiously and in rare circumstances to balance individual liberty with the interest of justice and of the society at large. Any liberal approach in construing the stringent provisions of the Special Acts may frustrate the very purpose and objective of the Acts.”
She concluded that:
- Courts should not interfere unless there is clear violation of statutory safeguards.
- The laws under Customs and GST Acts are valid.
Final Verdict
The Supreme Court has upheld the constitutional validity of arrest powers under Customs and GST Acts. The ruling reinforces that:
- Arrests under these laws are legal.
- Amendments made after 2011 clarify the process.
- Judicial review should be cautious and rare.
This judgment provides clarity on arrest powers, ensuring legal safeguards while enabling authorities to prevent tax evasion and financial crimes effectively.
Background of the Case
What Was the Om Prakash Judgment About?
Before the Om Prakash case (2011), offenses under the Customs Act were non-bailable. Once arrested, the accused would have to stay in jail for months before getting bail.
In Om Prakash, the Supreme Court ruled that:
- Offenses under the Customs Act and Excise Act, 1944 were non-cognizable.
- Even though officers had the power to arrest, they could only do so with a warrant from a magistrate.
- The offenses were bailable because the punishment was less than 3 years.
The reasoning was based on the interpretation of Sections 49 and 510 of CrPC (Code of Criminal Procedure). It was concluded that customs officers and excise officers, despite having arrest powers, were not given powers beyond those of a police officer in charge of a station.
Case Title-
Radhika Agarwal v. Union of India and Others (Neutral Citation: 2025 INSC 272).
Appearance
Petitioner: AORs Gautam Awasthi, Malak Manish Bhatt, Advocates Gautam Khazanchi, Neeha Nagpal, and Samridhi.
Respondents: ASG S.V. Raju, AORs Mukesh Kumar Maroria, G.S. Makker, Karan Bharihoke, Annam Venkatesh, Rajat Mittal, Kanu Agrawal, Malak Manish Bhatt, Ashish Batra, Advocates Sairica Raju, Kanu Agarwal, Zoheb Hossain, Arkaj Kumar, and Vivek Gurnani.
Would You Like Assistance In Drafting A Legal Notice Or Complaint?
CLICK HERE
Click Here to Read Our Reports on CJI Sanjeev Khanna
FOLLOW US ON YOUTUBE FOR MORE LEGAL UPDATES
