Context:
Supreme Court upheld that while arrest provisions under the Acts are valid, strict safeguards must be followed to prevent arbitrary arrests.
Ruling of SC:
- Arrest provisions under GST and Customs Act are constitutional
- Parliament has the authority to enact provisions to penalize and prevent tax evasion through arrests and penalties.
- However, the Court extended safeguards against arbitrary arrests, similar to those under the Prevention of Money Laundering Act (PMLA), 2002.
- Pre-conditions for Arrest Under GST and Customs Acts –
- Written Grounds of Arrest: Officers must document and provide the exact reasons for the arrest to the individual.
- Identification of Officers: Arresting officers must have clear, legible identification for transparency.
- Informing Family or Friends: The arrestee’s family or authorized person must be informed immediately.
- Right to Legal Representation: The arrested person has the right to an advocate, who must be present at a visual distance during questioning.
- Judicial Oversight: The Magistrate must verify whether all legal safeguards were followed before approving further detention.
- Customs officers making arrests must keep detailed records, including Informant’s Name, Accused’s Name, Nature of the Offense, Details of Seizure and Recorded Statements etc.
- Individuals fearing arrest under GST and Customs laws can seek anticipatory bail.
- Even if no FIR is filed, courts can grant anticipatory bail to prevent wrongful arrests.
- However, the court ruled that coercing individuals into making tax payments under the threat of arrest, even when there is no formal assessment of tax liability, are unconstitutional and violate the rule of law.
Difference Between Police and Customs/GST Officers in Arrests:
- Police Officers, as per the provisions of CrPC, can make arrest based on suspicion.
- Customs & GST Officers can only arrest if they have “reason to believe” that an offense has been committed.
Source: HT
Previous Year Question
What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’?
1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
2. It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
3. It will enormously increase the growth and size of the economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below:
[UPSC Civil Service Exam – 2017 Prelims]
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (a)
Explanation:
Statement 2 and statement 3 are not correct: GST is a domestic indirect tax. There is no such stated advantage that GST drastically reduces the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves. There is also no such stated advantage which says that it will enable India to take over China in the near future.