The Supreme Court told the Center on Thursday that any arrest under the Goods and Services Tax (GST) Act should not be based on mere suspicion but should be based on cogent material and compliance with proper procedure. A bench comprising Justices Sanjiv Khanna, MM Sundresh and Bela M Trivedi said the material on which an arrest is made must be verifiable by a magistrate. “An arrest under the law cannot be on mere suspicion, but after proper investigation and compliance with the procedure established by law. It must be based on material that must be verifiable by the magistrate and certified by the commissioner,” said the court. Solicitor General (ASG) SV Raju, who appeared before the court on behalf of the Centre.
The ASG responded: “Yes, any arrest made is based on adequate material. We do not arrest anyone in the air.” The court is hearing a batch of 281 petitions that have challenged various provisions of the Customs Act, the GST Act and the Prevention of Money Laundering Act amid allegations of misuse of penal provisions. Regarding the Customs Act, Raju said the right of arrest is not taken away from a customs officer and special legislation overrides any other existing law. “For investigation and arrest, the only necessary condition is the approval of the commissioner,” he said. The court said it will pronounce its verdict on legal principle and deal with individual cases separately. “There are too many petitions and it will be impossible to include all the facts in one judgment. Therefore, we will deal with individual cases separately after pronouncing the verdict on the legal principles in question,” the court said. The hearing was inconclusive and would continue on May 14, when Raju will make submissions on the GST provisions.
The top court on Tuesday directed the Center not to use “threats and coercion” during search and seizure operations against traders to recover GST and said they should be persuaded to clear the dues voluntarily. Examining various sections of the GST Act, the court said there is no provision in the law that empowers the authorities to exercise force for payment of outstanding dues. The apex court on May 2 asked the Center to provide details on the issuance of notices and arrests made under the provisions of the GST Act, saying it can interpret the law and lay down appropriate guidelines to prevent harassment of citizens by depriving them of their freedom. He expressed concern over the ambiguity of section 69 of the GST Act dealing with powers of arrest. The top court had said it would interpret the law to “strengthen” the concept of freedom, if necessary, but would not allow citizens to be harassed.
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