The Supreme Court ruled in favor of maintaining the constitutional validity of arrest and prosecution provisions under the GST and Customs Acts. A Special Bench—comprising Chief Justice Sanjiv Khanna, Justice Bela M. Trivedi, and Justice M.M. Sundresh—clarified that customs officials are not equivalent to police officers and that individuals arrested under these laws are entitled to the rights afforded under the Code of Criminal Procedure. Furthermore, the Court emphasized that arrests under these statutes must not be exploited for tax recovery purposes, ensuring that citizens have access to remedial measures such as those provided under Article 226.
In addressing 279 petitions that challenged the penal provisions of the Customs Act and the GST law, the Court also set aside earlier judgments, including those from the MakeMyTrip case regarding quantification before arrest. The decision mandates that authorities clearly document their 'reasons to believe' before proceeding with an arrest, drawing on principles established in prior notable cases. This procedural safeguard is intended to prevent arbitrary or coercive use of arrest powers.
Experts in the legal and tax fields have welcomed the ruling as it strikes a balance between enforcing strict measures against tax fraud and ensuring legal protections for taxpayers. They noted that the decision, which allows for anticipatory bail even before an FIR is filed, reinforces the importance of compliance with GST regulations while offering individuals a fair mechanism to challenge potential misuse of arrest powers.