Page 20 - Banking Finance April 2025

LEGAL UPDATE

Supreme Court upholds
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constitutional validity of
arrest provisions under Ô Ô Ô Ô Ô» »» »¹ ¹¿´
GST & Customs Acts
The Supreme Court upheld the consti-
tutional validity of arrest provisions Ò »© ­
under the GST and Customs laws but
also extended safeguards against arbi-
trary arrests to these Acts.
A bench of CJI Sanjiv Khanna and Jus-
tices M M Sundresh and Bela M Trivedi
- which was hearing a batch 279 peti-
tions challenging the validity of the belief is formed by the officer, or the Supreme Court's privacy judgement in
arrest provisions under the Customs correctness of the facts on the basis of any way. In fact, this has been the
Act, 1962 and the Central Goods and which such belief is formed to arrest the demand of the larger private sector for
Services Tax Act, 2017 - said: "Parlia- person, could not be a matter of judi- a very long time, IT Minister Ashwini
ment, under Article 246-A of the Con- cial review." Vaishnaw said.
stitution, has the power to make laws
The bench agreed with the view laid "There was some loophole in the law,
regarding GST and, as a necessary cor- down in earlier rulings that customs which we have fixed," he told. It must
ollary, enact provisions against tax eva- officers are not police officers, but also be noted that Aadhaar authenti-
sion Thus penalty or prosecution
added that provisions of Section 41B of cation, is being done by raising a vir-
mechanism for the levy and collection the CRPC, which describes procedure tual token on the backend without re-
of GST, and for checking its evasion, is
for arrest and the duties of an arrest- ally sharing Aadhaar data with any
a permissible exercise of legislative
ing police officer, would apply to Cus- private entity, the Minister explained.
power."
toms officers too. The IT Ministry, notified the Aadhaar
The CJI wrote for himself and Justice Authentication for Good Governance
It added that the arrestee under Cus-
Sundresh, while Justice Trivedi deliv-
toms Act as well as GST Act must be Amendment Rules (GG Rules), 2025
ered a separate judgment.
informed about their grounds of arrest. under the Aadhaar Act, which ex-
Agreeing with the CJI about power to The court also said that the fact of the panded the scope of availing voluntary
make arrests as well as the safeguards arrest must be communicated to the Aadhaar authentication to private sec-
to be followed under these statutes, person nominated or authorised by the tor services such as e-commerce,
Justice Trivedi said: "...when the legal- arrested person and that it shall be the travel, tourism, hospitality and health.
ity of such an arrest made under the duty of the Magistrate when an ar- However, the industry has spiked the
Special Acts like PMLA, UAPA, Foreign rested person is produced, to satisfy argument that the GG Rules, which
Exchange, Customs Act, GST Acts, etc. himself that the requirements have were first proposed for consultation in
is challenged, the court should be ex- been complied with. 2020 are against the Supreme Court's
tremely loath in exercising its power of 2019 judgment. Back then, the court
judicial review. Aadhaar amendment for had struck down the most debated
In such cases, the exercise of the private sector doesn't vio- Section 57 of the Aadhaar Act which
power should be confined only to see allowed private entities to use Aadhaar
whether the statutory and constitu- late SC order and had called it unconstitutional.
tional safeguards are properly complied The Aadhaar amendment to allow pri- Prasanna S, an advocate-on-record in
with or not... Sufficiency or adequacy vate entities to use the UIDAI authen- the Supreme Court, who was among
of material on the basis of which the tication platform does not violate the the advocates fighting for the Right to

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