Supreme Court limited the arrest power under the CGST and Customs Acts

The supreme court ruled last week that provisions allowing officials to detain people accused of breaking the Customs Act of 1962 and the Central Goods and Services Tax Act of 2017 (CGST Act) should be limited in order to prevent abuse.

The court's decision in Radhika Agarwal v. Union of India states that officials acting under these acts are subject to the same restrictions as police officers under the 1973 Code of Criminal Procedure (CrPC) and have authority "analogous" to that of police officers' arrest, search, and seizure powers.

The SC is still working to limit the prosecution authorities' broad authority in compliance with stringent regulations such as the Prevention of Money Laundering Act, 2002 (PMLA). In one of these cases, Arvind Kejriwal v. Directorate of Enforcement (2025), the Supreme Court set requirements that must be met before the ED is permitted to make an arrest. The SC has essentially transferred these standards, ruling that officials who want to make arrests under the CGST Act and the Customs Act must also adhere to them.

Despite not being police officials, officers under the Customs Act and the CGST Act "enjoy analogous powers such as the power to investigate, arrest, seize, interrogate, etc." according to the SC.

Sections 4 and 5 of the CrPC shall apply to other laws "to the extent that there is no contrary provision in the special act or any special provision excluding the jurisdiction and applicability of the Code," the court said. Consequently, the same restrictions that apply to a police officer's arrest power will also apply to a customs agent. These include an arrestee's right to have an advocate present during an interrogation, an officer's obligation to inform a friend or family member of the arrest, and the right of an arrested person (arrestee) to appear before a magistrate within twenty-four hours of being detained.

Section 104(4) of the Customs Act lists certain particular offenses as "cognizable," such as avoiding customs charges exceeding Rs. 50 lakhs or dealing in unlawful goods. Therefore, a customs officer (like the police) may conduct an arrest without a warrant if someone is suspected of committing one of these crimes. Section 104(5) states that any further infractions of the Customs Act shall be considered non-cognizable, and that a magistrate must issue a warrant before an arrest and investigation can start. Comparably, Section 132 of the CGST Act categorizes certain offenses into cognizable and non-cognizable groups and sets penalties based on the seriousness of the offense.

The court refused to invalidate the arrest authority provided to CGST and Customs Act officials, as requested by the petitioners. The court stated that there is "some force in the petitioners’ submission that the assessees are compelled to pay tax as a condition for not being arrested," citing data on the number of arrests, the amount collected, and the number of cases filed for GST offences since 2017.

The court ruled that tax authorities could not and should not force someone to pay past-due taxes by threatening to arrest them. In order to prevent such circumstances, it decided that anyone who felt so threatened or coerced "would be entitled to move the courts and seek a refund of tax deposited by them." The department would also take appropriate measures against the officers in these circumstances.