Persons can seek anticipatory bail even in absence of FIR: SC
Court ruled that authorities must establish reasons to believe before initiating proceedings, ensuring that arrests are not made arbitrarily. This is in line with principles laid down in the Arvind Kejriwal case
New Delhi : In a significant verdict, the Supreme Court on Thursday held that the provision of anticipatory bail is applicable to the Goods and Services Act and customs law and persons can move courts for pre-arrest bail even if an FIR is not in place.
A bench comprising Chief Justice Sanjiv Khanna and Justices MM Sundresh and Bela M Trivedi had reserved the verdict on May 16, last year on a batch of pleas challenging the penal provisions in the Customs Act, the GST Act as being non compatible with the Code of Criminal Procedure CrPC and the Constitution.
Pronouncing the verdict, the CJI said the provisions of CrPC and the subsequent law, Bharatiya Nagarik Suraksha Sanhita (BNSS), on issues like anticipatory bail would be applicable to persons under the Customs and the GST Acts. It held that persons facing possible arrest under the GST and Customs Acts are entitled to seek anticipatory bail, even before an FIR is registered.
Article 226 of the Constitution of India gives High Courts the power to issue writs to enforce rights, including fundamental rights.
Introducing necessary safeguards against coercive actions under the Central Goods and Services Tax (CGST) Act and the Customs Act, the court ruled that authorities must establish “reasons to believe” before initiating proceedings, ensuring that arrests are not made arbitrarily. This is in line with principles laid down in the Arvind Kejriwal case.
"While upholding the constitutional validity, which, to be honest, was not completely unexpected, the Supreme Court has provided for critical checks and balances, which should hopefully go a long way in curbing instances of tax terrorism and providing some level of protection for taxpayers," said Sudipta Bhattacharjee, partner at law firm Khaitan & Co.
The court also held that people facing arrest under GST or Customs law will be entitled to safeguards available under the Code of Criminal Procedure and that anticipatory bail can be allowed in cases of imminent arrest under GST law, overruling a contrary judgment.
"The court overruled the earlier judgment in the MakeMyTrip case and clarified that arrest under GST can happen even before a formal quantification of tax demand. However, it has been very clearly laid down that arrest cannot be misused as a tool for tax recovery and that any such coercive action for recovery can be challenged before a High Court under Article 226," Bhattacharjee added.
