Radhika Agarwal vs. Union Of INDIA And Others

Held

The Supreme Court rejected the challenge to the constitutional validity of the amendments to the Customs Act, 1962, and the provisions of the GST Act. The Court held that the amendments to the Customs Act were substantive and effectively modified the application of the Om Prakash case by designating specified offences as cognizable and non-bailable, while also imposing preconditions for arrest. The Court found that the statutory provisions themselves provided adequate safeguards against arbitrary and wrongful arrests. Regarding the GST Act, the Court upheld the constitutional validity of Sections 69 and 70, stating that under Article 246-A, Parliament has the power to make laws regarding GST, which necessarily includes enacting provisions against tax evasion. The powers to summon and arrest were deemed necessary for the effective levy and collection of GST and were considered ancillary and incidental to the power to levy and collect GST. The Court also clarified that while judicial review of arrests under special acts should be exercised cautiously, it is permissible to check for compliance with statutory and constitutional safeguards, such as the requirement for 'material' to form 'reasons to believe' and informing the arrestee of the grounds of arrest. Failure to comply with these safeguards would result in an illegal arrest. The Court emphasized that the arrest must be based on a belief supported by reasons relying on material, not mere suspicion.

Facts

The petitioner, Radhika Agarwal, challenged the constitutional validity of certain provisions of the Customs Act, 1962, and the Central Goods and Services Tax Act, 2017 (GST Act), specifically concerning the power of authorized officers to arrest. The challenge was premised on the argument that these provisions, particularly after amendments made to the Customs Act in 2012, 2013, and 2019, and sections 69 and 70 of the GST Act, were unconstitutional and infringed upon fundamental rights. The petitioner relied on the Supreme Court's decision in Om Prakash, which held that offences under the Customs Act were non-cognizable, requiring prior Magistrate approval for arrest. The revenue, represented by the Union of India and others, contended that the amendments had modified the application of Om Prakash and that the GST provisions were necessary for effective tax collection.

Key Issues

1. Whether the amendments made to the Customs Act, 1962, in 2012, 2013, and 2019, which designated specified offences as cognizable and non-bailable and imposed preconditions for arrest, are constitutionally valid and override the principles laid down in Om Prakash v. Union of India, thereby granting authorized officers the right to arrest without prior Magistrate approval? (Constitutional validity, interpretation of statutes) 2. Whether Sections 69 and 70 of the Central Goods and Services Tax Act, 2017, granting powers to summon and arrest, are constitutionally valid and fall within the legislative competence of Parliament under Article 246-A of the Constitution? (Constitutional validity, legislative competence) Petitioner's Arguments: The petitioner argued that the amendments to the Customs Act were an attempt to circumvent the ruling in Om Prakash and that the power of arrest under both the Customs Act and the GST Act was unconstitutional. They contended that the power to summon, arrest, and prosecute under the GST Act was not ancillary or incidental to the power of levying GST and thus beyond Parliament's legislative competence under Article 246-A, relying on Entry 93 of List I of the Seventh Schedule. Revenue's Arguments: The revenue argued that the amendments to the Customs Act were substantive and intended to modify the application of Om Prakash by designating certain offences as cognizable and non-bailable. They asserted that the GST provisions were necessary for the effective levy and collection of GST and that Parliament had the power to enact such provisions under Article 246-A. They also argued that the safeguards provided in the Acts were sufficient to prevent arbitrary arrests.