The Supreme Court on Thursday upheld the Constitutional validity of arrest and prosecution provisions under Goods and Services Tax Act and the Customs Act but provided safeguards against coercive actions including arrest. Experts highlight that the ruling is a significant development in tax enforcement and will help curb tax terrorism.
 
The ruling, by a Special Bench comprising Chief Justice Sanjiv Khanna, Justice Bela M. Trivedi, and Justice M.M. Sundresh, held that customs officials are not police officials and rights will be available to those arrested under the GST and Customs Acts.
 
The Court further clarified that these arrests cannot be used for recovery purposes, clarifying that arrests cannot be used for recovery and the accused can access remedies under Article 226 in such cases.
 
A total of 279 petitions were taken up by the Bench challenging the penal provisions under the Customs Act and the State and Central GST Act. The ruling also overruled the MakeMyTrip case on quantification before arrest. The matter is scheduled for final disposal next month on March 17.

Source – Business Today