Latest JudgementCustoms Act, 1962Central Goods and Services Tax (CGST) Act, 2017

Radhika Agarwal Vs. Union of India & Ors., 2025

Constitutionality of arrest powers under the Customs Act and CGST Act

Supreme Court of India·27 February 2025

Court

Supreme Court of India

Date of Decision

27 February 2025

Judges

Chief Justice Sanjiv Khanna ⦁ Justice Bela M. Trivedi

Citation

Acts / Provisions

Customs Act, 1962; Section 69 & 70, Central Goods and Services Tax (CGST) Act, 2017; Article 21, 22 & 246A Indian Constitution;

Facts of the Case

Multiple petitions (279 in total) were filed against the arrest provisions under the Customs Act and CGST Act.
Lead petitioner Radhika Agarwal and others argued that these provisions gave arbitrary powers to tax authorities, violating fundamental rights.
The petitioners contended that GST-related offenses should be treated as civil liabilities and not as criminal offenses leading to arrest.
The government defended the provisions, asserting that tax evasion is a serious economic offense requiring strict enforcement mechanisms.

Whether Sections 69 and 70 of the CGST Act are unconstitutional for violating Articles 21 and 22?
Whether GST-related offenses should be treated as criminal offenses warranting arrest?
Whether Parliament has the legislative competence under Article 246A to enact such provisions?
Whether the arrest powers conferred on tax officers are arbitrary and prone to misuse?

The Supreme Court ruled in favor of the Union of India, upholding the arrest provisions under the CGST Act and Customs Act.
Constitutionality of Sections 69 & 70 (Issue 1)
- The Court held that the provisions do not violate Articles 21 and 22.
- Since the CGST Act classifies certain tax evasion offenses as cognizable and non-bailable, arrest provisions are not arbitrary but legally justified.
Criminal Nature of GST Offenses (Issue 2)
- The Court ruled that tax evasion is an economic offense and must be dealt with sternly.
- The power to arrest in such cases is necessary to deter fraudulent activities.
Legislative Competence Under Article 246A (Issue 3)
- The Court affirmed Parliament’s power to enact laws on GST, including criminal provisions.
- It clarified that arrest powers are an inherent part of taxation law enforcement.
Possibility of Abuse & Safeguards (Issue 4)
- While acknowledging concerns about misuse, the Court noted that procedural safeguards, such as judicial oversight, exist to prevent arbitrary arrests.
The Court dismissed the petitions and upheld the arrest powers under the CGST Act.
The Court ruled that GST authorities can arrest individuals in cases of serious tax evasion.

Arrest under the CGST Act is constitutional and does not violate fundamental rights.
Tax evasion is a serious offense that warrants criminal enforcement.
Parliament has the power to enact such provisions under Article 246A.
Existing safeguards are adequate to prevent arbitrary arrests.

The Court took a strict stance on tax evasion, treating it as a criminal offense rather than a mere civil liability.
It reinforced the government’s authority to impose criminal penalties on economic offenses.
The ruling sets a precedent that tax evasion can attract criminal liability, not just civil penalties.
It may strengthen enforcement mechanisms under GST and Customs laws.
Courts in future cases will likely refer to this decision when dealing with tax-related arrests.
While procedural safeguards exist, there are concerns that tax officials may misuse arrest powers.
Courts may still intervene in specific cases where arrests appear excessive.
Tax compliance is critical as evasion can lead to arrest and prosecution.
Businesses should be aware of GST enforcement provisions to avoid legal troubles.
Future GST litigation will rely on this ruling to determine the scope of arrest powers.