The core issue revolves around the validity of property transfer via an irrevocable General Power of Attorney (GPA) and an unregistered agreement to sell, especially when the original owner died before the sale deed was executed by the GPA holder. The court examines whether the GPA holder had a legitimate interest in the property that would prevent the agency from terminating upon the principal’s death, contrasting this with a subsequent sale of the same property by the original owner’s legal heirs. Ultimately, the judgment upholds the High Court’s decision, emphasizing that a GPA alone does not transfer title and that proper registration is crucial for such transactions to be legally binding.
(A) Customs Act, 1962, Section 104(4) (post amendments in 2012 and post amendment 2019), Section 104(6) (post amendment 2013 and post amendment 2019) – Customs – Arrest – Challenge to vires of aforesaid provisions – The amendments made to the Customs Act in 2012, 2013 and 2019 are substantive and were introduced to effectively modify the application of Om Prakash case, which required a customs officer to obtain prior approval from a Magistrate before making an arrest – These amendments designated specified offences as cognizable and non-bailable, while also imposing certain pre- conditions and stipulations for making arrest – Consequently, the petitioners’ reliance on Om Prakash case is no longer valid and must be rejected – However, it remains important to examine the pre-conditions and safeguards established by the legislature to protect the life and liberty of arrestees.
(Para 22)
(B) Customs Act, 1962, Section 104(4) (post amendments in 2012 and post amendment 2019), Section 104(6) (post amendment 2013 and post amendment 2019) – Criminal Procedure Code, 1973, Section 41-B, 41-D, 50-A – Arrest under Customs Act – Duties of the officer making the arrest – Amendment of 2009 in Code, 1973, incorporate Section 41-B which outlines the procedures of arrest and the duties of the officer making the arrest – Although section 41-B refers to the police officer, we believe, it equally imposes a duty on the customs officers – Officers making an arrest are required to bear an accurate, legible, and clear indication of their names to facilitate ease of identification by the arrestee – Section 41-D of the Code is applicable for offences under the Customs Act – Accordingly, a person arrested by a customs officer has the right to meet an advocate of his choice during interrogation, but not throughout interrogation.
(Para 25 and 26)
(C) Customs Act, 1962, Section 104(4) (post amendments in 2012 and post amendment 2019), Section 104(6) (post amendment 2013 and post amendment 2019) – Criminal Procedure Code, 1973, Section 50-A – Arrest under Customs Act – Compliance of Provisions – Section 50A of the Code which states that every police officer or other person making an arrest under the Code shall forthwith give information regarding such arrest and place where the arrested person is being held to any of his friends, relatives, or other person as may be disclosed or nominated by the arrested person for the purpose of giving such information – The arrested person must be informed of this right – Held that the details of compliance with this mandate must be entered into the diary maintained by customs officer – It is the duty of the Magistrate, when an arrested person is produced, to satisfy himself that the requirements of Section 50A(2) and (3) have been complied with – These stipulations will apply in cases of arrests made by the customs officers.
(Para 27)
(D) Customs Act, 1962, Section 104(4) (post amendments in 2012 and post amendment 2019), Section 104(6) (post amendment 2013 and post amendment 2019) – Criminal Procedure Code, 1973, Section 41-B, 41-D, 50-A and 55-A – Arrest under Customs Act – Reasonable care of their health and safety of accused – Section 55A of the Code, 1973, inserted in 2009, states that it shall be the duty of the person having custody of the accused to take reasonable care of their health and safety – This provision shall be equally applicable to arrests under the Customs Act – Provisions of the Section 41-B, 41-D, 50-A and 55-A of the Code, 1973 do not in any way fall foul of or repudiate the provisions of the Customs Act – They complement the provisions of the Customs Act and in a way ensure better regulation, ensuring due compliance with the statutory conditions of making an arrest.
(Para 29 and 29)
(E) Customs Act, 1962, Section 104(1) – Prevention of Money Laundering Act, 2002, Section 19 – Customs Act – Power to arrest – Section 104(1) stipulates that arrests may be made if a customs officer, empowered by general or special order of the Principal Commissioner of Customs or Commissioner of Customs, has “reasons to believe” that an offence has been “committed” in terms of Section 132 or Section 133 or Section 135 or Section135-A or Section 136 of the Customs Act – Thus, Section 104(1), effectively incorporates safeguards similar to those outlined in Section 19(1) of the PML Act – The semantical distinction, however, between Section 19(1) and Section 104(1), is twofold: first, Section 104(1) does not explicitly stipulate the requirement of a customs officer having “material in their possession”; and second, Section 104(1) does not explicitly state that the customs officer must reasonably believe that the arrestee is “guilty of an offence” – Instead, Section 104(1) states that the customs officer must have “reasons to believe” that the arrestee has “committed an offence” – Held that there is substantively no difference between a person being guilty of an offence and a person committing an offence – Cambridge Dictionary defines “guilty party” as “someone who has done something wrong or who has ‘committed’ a crime” – According to the Oxford Dictionary, the etymology of “guilty” also traces back to the Old English Period (pre-1150), referring in the context of law to someone who “has ‘committed’ some specified offence” – Thus, when we apply a plain language interpretation, a person being “guilty” of an offence and a person “committing” an offence is self-same and identical insofar as Section 19(1) vis-à-vis Section 104(1) is concerned.
(Para 40 and 41)
(F) Customs Act, 1962, Section 104(1) – Criminal Procedure Code, 1973, Section 41 – Customs Act – Power to arrest – Section 104(1) does not explicitly require a customs officer to have “material in their possession” does not imply that a customs officer can conclude that an offence has been committed out of thin air or mere suspicion – The threshold for arrest under Section 104(1) of the Customs Act is higher than that under Section 41 of the Code – Section 41 allows the police to arrest a person without a warrant, if a “reasonable complaint has been made”, or “credible information has been received”, or “a reasonable suspicion exists” that the person has committed a cognizable offence – In contrast, Section 104(1) sets a higher threshold, stipulating that a customs officers may only arrest a person if they have “reasons to believe” that a person has committed an offence – A person is said to have a “reason to believe” a thing, if they have sufficient cause to believe that thing but not otherwise – [See Section 26 of the Indian Penal Code, 1860.] – This represents a more stringent standard than the “mere suspicion” threshold provided under Section 41.
(Para 43)
(G) Customs Act, 1962, Section 104 – Prevention of Money Laundering Act, 2002, Section 19 – Customs Act – Power to arrest – Framework of the Customs Act explicitly classifies offences into bailable and non-bailable, as well as cognizable and non- cognizable, the “reasons to believe” must reflect these classifications when justifying an arrest – The reasoning must weigh in why an arrest is being made in a specific case, particularly given the specific severity assigned to the offence by the legislature – The reasoning must also state how the monetary thresholds outlined in the Act are met – Subclauses (b) to (d) of Section 104(4) provide monetary thresholds for cognizable offences, while subclauses (a) and (c) to (e) of Section 104(6) provide those for non-bailable offences – The “reasons to believe” must include a computation and/or an explanation, based on factors such as the goods seized, from which a conclusion of guilt can be drawn – This level of detail is crucial, as it facilitates judicial review of the exercise of the power to arrest – The department’s authority to arrest under Section 104 hinges on satisfying these statutory thresholds – Held that do not find any inconsistency between Section 19(1) of the PML Act and Section 104(1) of the Customs Act – We are of the opinion that principles and ratio developed in the case of Arvind Kejriwal case are equally applicable to the power of arrest under Section 104 of the Customs Act – The respondent authorities directed to comply with the mandate of this judgment and that of Arvind Kejriwal case.
(Para 44 to 46)
(H) Customs Act, 1962, Section 104(1), Section 104(4) (post amendments in 2012 and post amendment 2019), Section 104(6) (post amendment 2013 and post amendment 2019) – Customs Act – Grounds of arrest – Section 104(1) requires that a person arrested as soon as may be is required to be informed of the grounds of such arrest – The grounds of arrest must be given in writing to the arrestee before he is produced before the Magistrate in terms of Section 104(2) – This is necessary as it enables the accused to contest and challenge his arrest and seek bail from the court – To deny and not give the grounds in writing would be to deprive the accused of his right in terms of Section 104(1) and also to seek right of bail under the provisions of the Code – This interpretation would be in consonance with Article 22(1) of the Constitution which states that no person who is arrested shall be detained in custody without being informed as soon as may be of the grounds of such arrest, nor shall such arrest be denied the right to consult and to be defended by a legal practitioner of his choice – Challenge to the amendments as well as provisions of the Customs Act rejected – Held that reliance placed by the petitioners on the decision of this Court in Om Prakash case is misconceived as the statutory provisions have undergone amendments to bring them in consonance with the law of the land – Moreover, the provisions themselves provide enough safeguards against arbitrary and wrongful arrests.
(Para 47 and 48)
(I) Evidence Act, 1872, Section 25 – Customs Officers – Whether police officers – Writ petitioners’ submission that customs officers are police officers held to be unfounded and flawed – Held that customs officers are not police officers.
(Para 14 to 16)
(J) Criminal Procedure Code, 1973, Section 167(2) – Customs Act, 1962, Section 104 – Customs Act – Application of Cr PC Provision – Interplay of Section 167 of the Code and Section 104 of the Act, 1962 – Section 167(2) of the Code allows a police officer to request police remand/custody of a person arrested for a period not exceeding 15 days when an investigation cannot be completed within 24 hours of the arrest – Deepak Mahajan case clarifies that Section 167(2) of the Code applies equally to Section 104 of the Customs Act – Thus, a Magistrate has the authority under Section 167(2) of the Code to authorise detention of such person to the custody of a customs officer.
(Para 118)
(K) Criminal Procedure Code, 1973, Section 438 – Customs Act, 1962 – Anticipatory bail – Registration of case not necessary – Registration of a case and entries of a case diary are not compulsory when entertaining an application for grant of anticipatory bail under Sections 438 and 439 of the Code – Anticipatory bail can be invoked on the likelihood of arrest based on reasonable belief of the person having committed a non-bailable offence – At the same time, Deepak Mahajan case holds that customs officer must mandatorily maintain case diaries.
(Para 19)
(L) Central Goods and Services Tax Act, 2017, Section 67 and 69 –Criminal Procedure Code, 1973, Section 4(2) – Goods and Services Tax Act – Search and seizure – Arrest – Held that the GST Acts are not a complete code when it comes to the provisions of search and seizure, and arrest, for the provisions of the Code would equally apply when they are not expressly or impliedly excluded by provisions of the GST Acts – There is no specific stipulation or provision in the GST Acts in respect of facets of investigation, inquiry or trial – In view of Section 4(2) of the Code, the procedure prescribed under the Code also applies to the special statutes unless the applicability is expressly barred or prohibited.
(Para 50 and 51)
(M) Central Goods and Services Tax Act, 2017, Section 69 and 132 – Goods and Services Tax Act – Arrest – Held that to pass an order of arrest in case of cognizable and non-cognizable offences, the Commissioner must satisfactorily show the reasons to believe recorded by him, that the person to be arrested has committed a non-bailable offence and that the pre-conditions of sub-section (5) to Section 132 of the Act are satisfied – Failure to do so would result in an illegal arrest – The computation of the tax involved in terms of the monetary limits under clause (i) of sub-section (1), which make the offence cognizable and non-bailable, should be supported by referring to relevant and sufficient material – The aforesaid exercise should be undertaken in right earnest and objectively, and not on mere ipse dixit without foundational reasoning and material – The arrest must proceed on the belief supported by reasons relying on material that the conditions specified in sub-section (5) of Section 132 are satisfied, and not on suspicion alone – An arrest cannot be made to merely investigate whether the conditions are being met – Findings and the ratio recorded with reference to the Customs Act would equally apply insofar as maintenance of records as well as obligations of the arresting officer and rights of the accused/person arrested are concerned – Compliance in this regard must be made.
(Para 56, 57 and 60)
(N) Central Goods and Services Tax Act, 2017, Section 74(5) – Goods and Services Tax Act – Extracting tax by threatening arrest – Submission that the assessees are compelled to pay tax as a condition for not being arrested – Held that Sub-section (5) to Section 74 of the GST Acts gives an option to the assessee and does not confer any right on the tax authorities to compel or extract tax by threatening arrest – This would be unacceptable and violative of the rule of law – In case there is a breach of law, and the assessees are put under threat, force or coercion, the assessees would be entitled to move the courts and seek a refund of tax deposited by them – The department would also take appropriate action against the officers in such cases.
(Para 67 and 68)
(O) Central Goods and Services Tax Act, 2017, Section 70 – Goods and Services Tax Act – Investigation – Held that a person summoned under Section 70 of the GST Acts is not per se an accused protected under Article 20(3) of the Constitution – This is because the prohibitive sweep of Article 20(3) of the Constitution does not go back to the stage of interrogation – Investigation must be allowed to proceed in accordance with law and there should not be any attempt to dictate the investigator and at the same time, there should not be any misuse of power and authority.
(Para 69)
(P) Criminal Procedure Code, 1973, Section 438 – Central Goods and Services Tax Act, 2017, Section 69 and 132 – Anticipatory bail – Power to grant – Held that the power to grant anticipatory bail arises when there is apprehension of arrest – This power, vested in the courts under the Code, affirms the right to life and liberty under Article 21 of the Constitution to protect persons from being arrested – It is not essential that the application for anticipatory bail should be moved only after an FIR is filed, as long as facts are clear and there is a reasonable basis for apprehending arrest – Some decisions[State of Gujarat v. Choodamani Parmeshwaran Iyer and Another, 2023 SCC OnLine SC 1043; Bharat Bhushan v. Director General of GST Intelligence, Nagpur Zonal Unit Through Its Investigating officer, SLP (Crl.) No. 8525/2024.] of this Court in the context of GST Acts which are contrary to the aforesaid ratio should not be treated as binding.
(Para 70)
(Q) Central Goods and Services Tax Act, 2017, Section 162(1), 74 – Goods and Services Tax – Compounding of offence – Submitted that till an assessment order was passed under Section 74 of the GST Acts, the liability cannot be quantified and hence an assessee cannot move an application for compounding of offences repelled – Held that there is a difference between the compounding of offences and the arrest of a person – Already stipulated sufficient safeguards to ensure that no arrests are made till the Commissioner is able to show and establish, on the basis of material and evidence, that the conditions of clauses (a) to (d) as well as clause (i) of sub-section 1 to Section 132 of the GST Acts are satisfied and therefore the offences are non-bailable.
(Para 71)
(R) Central Goods and Services Tax Act, 2017, Section 69 and 70 – Constitution of India, Article 246-A – Goods and Services Tax – Power to arrest and the power to summon – Challenge to the constitutional validity of Sections 69 and 70 – Submitted that Article 246-A of the Constitution while conferring legislative powers on Parliament and State Legislatures to levy and collect GST, does not explicitly authorize the violations thereof to be made criminal offences and that the power to summon, arrest and prosecute are not ancillary and incidental to the power of levying GST and therefore, are beyond the legislative competence of the Parliament under Article 246-A of the Constitution – Argument rejected – Article 246-A of the Constitution is a special provision defining the source of power and the field of legislation for the Parliament and the State Legislature with respect to GST – Held that a penalty or prosecution mechanism for the levy and collection of GST, and for checking its evasion, is a permissible exercise of legislative power – The GST Acts, in pith and substance, pertain to Article 246-A of the Constitution and the powers to summon, arrest and prosecute are ancillary and incidental to the power to levy and collect goods and services tax – Vires challenge to Sections 69 and 70 of the GST Acts must fail and is accordingly rejected.
(Para 72 to 75)
Radhika Agarwal V. Union Of India
Supreme Court: 2025 INSC 272: (DoJ 27-02-2025)
