The Supreme Court, in Radhika Agarwal v. Union of India, ruled that officials under the Customs Act, 1962, and CGST Act, 2017, must follow the same restrictions as police officers under the Criminal Procedure Code (CrPC), 1973, while exercising arrest, search, and seizure powers.
This decision aligns with the SC’s broader effort to curb prosecuting agencies’ misuse of arrest powers, as seen in Arvind Kejriwal v. Directorate of Enforcement (2025), where the Court set strict conditions for arrests under the PMLA, 2002 and extended them to Customs and CGST cases.
Key Takeaways from the Judgement
- SC Recognizes Customs & CGST Officers as Having Police-Like Powers
- While Customs & CGST officials are not police officers, they exercise similar investigative powers, including arrest, search, seizure, and interrogation.
- The CrPC applies to these officials, ensuring procedural safeguards for individuals under investigation.
- Limits on Arrest Powers
- Officials cannot exceed the powers of a police officer in charge of a police station.
- CrPC Sections 4 & 5 apply, unless expressly overridden by the CGST or Customs Act.
- Key safeguards for arrested persons:
- Presented before a magistrate within 24 hours of arrest.
- Family/friend notification of the arrest.
- Right to have an advocate present during interrogation.
- Conditions for Arrest Under Customs & CGST Acts
- Customs Act:
- Section 104(4) – Offences like smuggling over ₹50 lakh are cognizable, allowing arrest without a warrant.
- Section 104(5) – All other offences are non-cognizable, requiring magistrate’s approval.
- CGST Act:
- Section 132 – Differentiates between cognizable & non-cognizable offences based on the amount of tax evasion.
- Safeguards Against Arbitrary Arrest
The SC, in Arvind Kejriwal v. Directorate of Enforcement (2025), set conditions for arrest under PMLA, 2002, which it extended to Customs & CGST officials in Radhika Agarwal. These include:
✅ Material evidence before arrest – Mere suspicion is not enough.
✅ A documented ‘Reason to Believe’ – Officers must record in writing why they believe the person is guilty.
✅ Informing the arrestee of grounds of arrest – Ensures fair legal recourse.
- Addressing Misuse of Arrest Powers
- SC refused to strike down arrest powers under CGST & Customs Acts but ruled that:
- Tax officials cannot misuse arrests to force tax payments.
- Coercion to pay taxes under threat of arrest is illegal.
- Individuals forced to pay taxes under duress can seek refunds & legal remedies.
- Officials misusing these powers could face disciplinary action.
- CBIC directed to frame guidelines preventing threats of arrest in tax recovery cases.
Conclusion
- The SC’s ruling strengthens procedural safeguards against arbitrary arrests in tax-related cases.
- While Customs & CGST officers retain arrest powers, their use is now subject to CrPC restrictions.
- This judgment ensures due process, protects taxpayer rights, and prevents misuse of enforcement powers.