Supreme Court: Arrest under GST Act should not be on mere suspicion

May11,2024 #gst act #SUPREME COURT

Published on: May 11, 2024 19:57 IST

Supreme Court said that any arrest under the Goods and Services Tax (GST) Act should not be on mere suspicion but has to be based on cogent material and adherence to proper procedure.

Supreme Court bench of Justices Sanjiv Khanna, M M Sundresh and Bela M Trivedi said the material upon which an arrest is made should be verifiable by a magistrate. “An arrest under the Act cannot be on mere suspicion but after proper inquiry and adherence to the procedure laid down under the law. It should be based on material that should be verifiable by the magistrate and certified by the commissioner,” the bench told Additional Solicitor General (ASG) S V Raju, who appeared in the court on behalf of Central Government.

The ASG affirmed, “Indeed, any arrest carried out is grounded in substantial evidence. We do not make arrests arbitrarily.” Presently, the court is reviewing a cluster of 281 petitions challenging various clauses of the Customs Act, the GST Act, and the Prevention of Money Laundering Act, amidst allegations of misapplication of punitive measures.

Addressing the Customs Act, Raju clarified that the authority to arrest remains vested in customs officials, asserting that specialized legislation supersedes other concurrent laws. “The sole prerequisite for investigation and arrest is the approval of the commissioner,” he emphasized. The bench declared its intention to deliver a verdict on the legal principles at hand and subsequently address individual cases separately due to the extensive nature of the petitions. “Given the multitude of petitions, it would be unfeasible to encompass all details within a single judgment.

Thus, we will address each case individually subsequent to pronouncing our decision on the pertinent legal principles,” remarked the bench. The hearing adjourned without conclusion and is set to reconvene on May 14, during which Raju will present arguments on GST provisions. On Tuesday, the apex court instructed the government to refrain from resorting to “coercion and intimidation” in search-and-seizure operations targeting traders for GST recovery, advocating for voluntary settlement of dues. Scrutinizing various sections of the GST Act, the bench observed the absence of provisions authorizing authorities to employ force for outstanding dues.

On May 2, the apex court had requested the government to furnish details regarding notices issued and arrests made under the GST Act, expressing intent to interpret the law and establish appropriate guidelines to prevent citizen harassment and safeguard their liberty.

The court expressed apprehension over the ambiguity in section 69 of the GST Act concerning arrest powers and vowed to interpret the law to reinforce the concept of liberty, if necessary, while preventing harassment of citizens.

Related Post