New Delhi: In a landmark ruling, the Supreme Court on Thursday introduced crucial safeguards against arbitrary arrests and coercive measures under the Central Goods and Services Tax (CGST) Act and the Customs Act. The verdict mandates that authorities must establish “reasons to believe” before initiating proceedings, strengthening legal protections for individuals facing tax-related inquiries.
A three-judge bench led by Chief Justice of India Sanjiv Khanna, along with Justices MM Sundresh and Bela M Trivedi, held that individuals have the right to seek pre-arrest bail even in cases where no FIR has been registered. The ruling further clarified that provisions of the Criminal Procedure Code (CrPC) will now apply in cases under GST and Customs laws, reinforcing legal safeguards against misuse of power.
The court took a strong stance against enforcement officers using “threats and coercion” during search and seizure operations under the GST framework. It directed that such officers should face departmental proceedings, sending a strong message against misuse of authority.
Significantly, the bench also ruled that customs officers do not hold the status of police officers and therefore cannot exercise unrestricted policing powers. Additionally, the safeguards applicable to arrests under laws like the Prevention of Money Laundering Act (PMLA) will now extend to GST and Customs cases, ensuring that authorities must clearly document their “reasons to believe” before taking coercive action.
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