1). GST Act’s Arrest & Summons Provisions Are Constitutional: Supreme Court

Case Background

This case involved a challenge to the Constitutional validity of Sections 69 and 70 of the Goods and Services Tax (GST) Act. These provisions grant the government the power to arrest individuals and power to summon people in cases related to GST violations.

The petitioners argued that the Parliament lacked the power to enact these provisions because Article 246-A of the Constitution, which gives the Parliament and State Legislatures the power to levy and collect GST, does not explicitly mention criminal penalties for GST violations. They also claimed that the Parliament can only make criminal laws for matters listed under List I of the Seventh Schedule (Entry 93), and since GST is covered under Article 246-A, criminal penalties related to it should not be allowed.

Issues of the Case

1. Does the Parliament have the power under Article 246-A to include provisions for arrest and summons in the GST Act?
2. Are Sections 69 and 70 of the GST Act unconstitutional because they create criminal penalties without explicit authorization?

Court Observations

The case was heard by a three-judge bench comprising Chief Justice of India Sanjiv Khanna, Justice MM Sundresh, and Justice Bela M Trivedi. The Court rejected the arguments made by the petitioners and made the following key observations:

• Article 246-A is a special provision that grants the Parliament and State Legislatures the power to make laws regarding GST. This power includes not just taxation but also measures to prevent tax evasion.
• The Court applied the doctrine of pith and substance, which means that while interpreting laws, the main objective (substance) of the law must be considered, rather than just looking at individual words. Since the GST Act primarily deals with tax collection and enforcement, the powers of arrest and summons are ancillary and incidental to this purpose.
• The Court emphasized that while deciding legislative competence, laws should not be interpreted narrowly but should be given their broadest meaning to ensure effective governance.

Court Ruling

The Supreme Court upheld the Constitutional validity of Sections 69 and 70 of the GST Act and ruled that:

• The Parliament has the authority under Article 246-A to enact laws related to GST and include provisions to prevent tax evasion.
• Provisions related to summons and arrest are necessary for the effective levy and collection of GST and are therefore valid.
• Penalties and prosecution for GST evasion are legally permissible and do not exceed the Parliament’s powers.

Legal Provisions 

• Article 246-A of the Constitution – Grants legislative power to Parliament and State Legislatures to make laws on GST.
• Doctrine of Pith and Substance – Used to determine whether a law is valid by examining its primary purpose rather than specific technicalities.

Significance of the Judgment

1. Strengthens GST enforcement – Ensures that tax authorities have the necessary powers to summon, investigate, and arrest offenders to curb tax evasion.
2. Clarifies legislative power – Confirms that Article 246-A allows Parliament to make criminal provisions related to GST enforcement.
3. Prevents misuse of technical arguments – Stops businesses or individuals from challenging GST enforcement on the grounds that the law does not explicitly mention criminal penalties.

The Supreme Court’s ruling upholds the validity of Sections 69 and 70 of the GST Act, confirming that the power to summon and arrest for GST violations is within the Parliament’s authority. The decision ensures that GST enforcement remains effective and prevents tax evasion.

Case Title: Radhika Agarwal v. Union of India and Ors., W.P.(Crl.) No. 336/2018 (and connected matters)

2). BNSS/CrPC Safeguards Mandatory for Arrests Under GST & Customs Acts: Supreme Court

Case Background

A batch of 279 petitions challenged the penal provisions of the Customs Act and Central Goods and Services Tax (CGST)/State Goods and Services Tax (SGST) Acts, arguing that these provisions were incompatible with the Code of Criminal Procedure (CrPC) and the Constitution.

The petitioners claimed that:

1. Arrests under the GST and Customs Acts should follow CrPC safeguards to protect accused persons.
2. Customs officers should not be treated as police officers with unrestricted powers.
3. Arrests should only happen with solid evidence, not mere suspicion.

The Supreme Court reserved its verdict on May 16, 2024, and delivered its judgment on February 27, 2025.

Issues of the Case

1. Whether the CrPC provisions related to arrests and rights of accused persons apply to the GST and Customs Acts.
2. Whether anticipatory bail is available for GST and Customs Act violations.
3. Whether Customs officers should be treated as police officers for arrest purposes.
4. What standards should apply when authorities exercise their power to arrest under these tax laws.

Court Observations

A three-judge bench consisting of Chief Justice of India Sanjiv Khanna, Justice MM Sundresh, and Justice Bela M Trivedi made several key observations:

1. CrPC Safeguards Apply to GST and Customs Act Arrests

• Arrests under GST and Customs laws must follow CrPC safeguards, which protect accused persons.
• The Supreme Court extended the principles from the Arvind Kejriwal case (related to PMLA arrests) to GST and Customs, stating that an arrest must be based on "reasons to believe" and supported by evidence.

2. Customs Officers Are Not Police Officers

• The Court rejected the argument that Customs officers are police officers.
• However, it held that when Customs officers arrest someone, they must follow the same safeguards as police officers under CrPC.

3. Anticipatory Bail is Available for GST and Customs Arrests

• The Court ruled that a person can seek anticipatory bail under the GST and Customs Acts, even if no FIR has been registered.
• This means individuals fearing wrongful arrest can approach the courts for protection in advance.

4. Arrests Must Follow Strict Procedures

• The Court emphasized that:
  • Arrests cannot be made on mere suspicion.
  • Tax officers must have verifiable material before arresting someone.
  • These materials should be examined by a magistrate before any action is taken.
  • Circulars issued by the GST department regarding arrest procedures must be strictly followed.

5. Protection Against Coercion by Tax Officials

• The Court acknowledged that there were allegations of coercion by tax officials, where people were forced to pay taxes unfairly.
• The Court warned that such practices violate the law and that officers found guilty of coercion should face departmental action.

6. Justice Bela Trivedi’s Concurring Judgment on Judicial Review

• Justice Trivedi agreed with the main judgment but added that:
  • Courts should not interfere in arrests unless there is clear evidence of malice, illegality, or abuse of power.
  • The adequacy of evidence for an arrest should not be questioned by courts at an early stage of investigation.
  • Courts should use judicial review cautiously to balance individual liberty and public interest.

Court Rulings

1. CrPC provisions (now under Bharatiya Nagarik Suraksha Sanhita) apply to GST and Customs arrests, ensuring procedural safeguards.
2. Anticipatory bail is allowed under the GST and Customs Acts, so individuals can seek court protection if they fear wrongful arrest.
3. Customs officers are not police officers, but they must follow similar rules when making arrests.
4. Arrests must be based on valid reasons and verifiable material, and tax officers must follow due process.
5. Coercion by tax officials is illegal, and victims can approach courts for relief.

Legal Provisions 

• Article 21 of the Constitution – Protects personal liberty, ensuring that no one can be arrested arbitrarily.
• Article 226 of the Constitution – Allows individuals to approach the High Court if they are wrongly arrested or harassed.
• CrPC( now Bharatiya Nagarik Suraksha Sanhita)—Sections 41B(36 of BNSS), 41D(38 of BNSS),  50A(48 of BNSS) and 55A(56 of BNSS) now apply to arrests under the GST and Customs Acts. (
• Section 69 of the GST Act & Section 104 of the Customs Act – The Court ruled that these provisions must be interpreted in a manner that safeguards liberty.

Significance of the Judgment

1. Protects Citizens from Arbitrary Arrests – Ensures that GST and Customs officials cannot misuse their arrest powers.
2. Expands the Right to Anticipatory Bail – Gives individuals the right to seek legal protection before being arrested.
3. Establishes Accountability for Tax Officials – Warns tax authorities against using force or coercion to extract payments.
4. Balances Tax Enforcement and Individual Rights – Ensures that tax collection does not violate fundamental rights.

The Supreme Court’s decision reinforces legal safeguards for individuals facing arrest under the GST and Customs Acts. It ensures that arrests follow proper procedures, that anticipatory bail is available, and that coercion by tax officials will not be tolerated. This ruling strikes a balance between tax enforcement and personal liberty, protecting citizens from harassment while allowing authorities to act against tax evasion.

Case Title: Radhika Agarwal v. Union of India and Ors., W.P.(Crl.) No. 336/2018 (and connected matters)

3). Power of Attorney & Agreement to Sell Won’t Transfer Ownership; GPA Becomes Void on Principal’s Death: Supreme Court

Case Background

The case revolved around a dispute over the ownership of a property after the original owner, Muniyappa, had executed a General Power of Attorney (GPA) and an unregistered Agreement to Sell in favor of A. Saraswathi in 1986. The GPA allowed Saraswathi to manage and sell the property. However, after Muniyappa passed away in 1997, Saraswathi used the GPA to sell the property to her son, M.S. Ananthamurthy, in 1998.

Later, Muniyappa’s legal heirs sold the same property to S. Sreenivasulu in 2003, who then transferred it multiple times before it finally reached J. Manjula, one of the respondents in this case. In 2007, Manjula filed a suit for a permanent injunction against Ananthamurthy, claiming ownership of the property.

The Trial Court ruled in favor of Manjula, stating that Saraswathi’s GPA had become invalid upon Muniyappa’s death, making her sale to her son legally void. The High Court upheld this ruling, leading Ananthamurthy to appeal before the Supreme Court.

Issue of the Case

The key question before the Supreme Court was:

• Did A. Saraswathi, as a GPA holder with an Agreement to Sell, have any legal right to execute the sale deed in favor of her son after the death of Muniyappa?

Court Observations

A bench comprising Justices JB Pardiwala and R Mahadevan made the following important observations:

1. A General Power of Attorney (GPA) becomes invalid when the principal (the person who gave the power) dies, unless it is coupled with an interest.
2. A GPA does not transfer ownership; it only allows the agent to act on behalf of the principal.
3. For a GPA to be irrevocable under Section 202 of the Indian Contract Act, 1872, the agent must have a direct proprietary interest in the subject matter.
4. Simply labeling a GPA as "irrevocable" does not make it so. There must be a clear indication that it was created to secure an interest for the agent.
5. An unregistered Agreement to Sell does not confer ownership. As per Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2012), property ownership can only be transferred through a registered sale deed.

Court Rulings and Decision

The Supreme Court ruled that:

• The GPA given to Saraswathi terminated upon Muniyappa’s death in 1997, meaning she had no legal authority to sell the property in 1998.
• Since the GPA did not mention that it was created to protect Saraswathi’s interest, it was not irrevocable.
• The Agreement to Sell, being unregistered, did not transfer ownership rights to Saraswathi or her son.
• Even if the GPA and Agreement to Sell were read together, they would not confer ownership unless the documents were registered under Section 17(1)(b) of the Registration Act, 1908.
• The sale by Muniyappa’s legal heirs was valid, and Manjula had the rightful ownership of the property.

The Court dismissed Ananthamurthy’s appeal, stating that the Trial Court and High Court had correctly ruled in favor of Manjula.

Legal Provisions 

• Section 202 of the Indian Contract Act, 1872 – A power of attorney becomes irrevocable only if it is given to secure an interest for the agent.
• Section 17(1)(b) of the Registration Act, 1908 – Documents creating an interest in immovable property must be registered.
• Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2012) – A GPA or an Agreement to Sell does not transfer ownership without a registered sale deed.

Significance of the Judgment

• Clarifies that a GPA without interest automatically terminates upon the principal’s death.
• Reaffirms that an Agreement to Sell does not transfer ownership unless followed by a registered sale deed.
• Prevents misuse of GPAs to unlawfully transfer property after the principal’s death.
• Strengthens property laws by ensuring that transfers follow legal procedures.

The Supreme Court reinforced the principle that a General Power of Attorney is not a tool for transferring property ownership. In this case, since Saraswathi’s GPA was not coupled with an interest, it became void upon Muniyappa’s death, making her subsequent sale invalid. This judgment protects the rights of legal heirs and ensures that property transactions are conducted transparently and lawfully.

Case Title: M. S. ANANTHAMURTHY & ANR. VERSUS J. MANJULA ETC

4). Supreme Court : Person Deprived of Money Entitled to Compensation with Interest Under Doctrine of Restitution

Case Background

The case involved a dispute over the refund of an e-stamp paper worth ₹28,10,000 purchased by the appellant for a property transaction. The e-stamp paper was misplaced by the broker, preventing the appellant from using it for the property purchase. Due to this, the appellant had to buy another e-stamp paper, causing financial loss and inconvenience.

To recover the lost amount, the appellant:

• Filed a police complaint and published a newspaper notice about the loss.
• Applied for a refund from the Collector of Stamps, arguing that the government was unjustly enriched by retaining the e-stamp money without legal justification.

However, the Collector rejected the refund request. The appellant then approached the High Court, which ruled in favor of the refund but denied interest on the refunded amount. Unsatisfied, the appellant appealed to the Supreme Court, seeking interest as compensation for being deprived of his money.

Issue of the Case

The key question before the Supreme Court was:

• Is the appellant entitled to interest on the refund of the e-stamp amount for being deprived of its use?

Court Observations

A bench comprising Justices JB Pardiwala and R Mahadevan made the following observations:

1. Interest is a form of compensation for the wrongful deprivation of money. A person who is deprived of their rightful money should be restored to their original financial position.
2. Unjust enrichment occurs when one party benefits financially at the expense of another without legal justification. The government, having retained the appellant’s e-stamp amount, had an obligation to pay interest.
3. The doctrine of restitution applies, which means restoring a party to the position they would have been in if the wrongful retention had not occurred.
4. Interest is a natural addition to money and serves as a remedy for delayed refunds. The Court quoted Union of India v. Tata Chemicals Ltd. (2014) 6 SCC 335, which established that money received and retained without right carries an obligation to pay interest.

Court Rulings and Decision

The Supreme Court ruled in favor of the appellant, holding that:

• The appellant was entitled to interest on the refunded e-stamp amount since he was deprived of its use.
• The doctrine of restitution required compensating the appellant for his financial loss caused by the wrongful retention of money.
• Interest is a necessary remedy in cases of financial deprivation, following precedents like Authorised Officer Karnataka Bank v. M/s R.M.S. Granites Pvt. Ltd. and Secretary, Irrigation Department, Government of Orissa v. G.C. Roy (1992) 1 SCC 508.
• The respondents were directed to pay ₹4,35,968 as interest within two months.

Legal Provisions 

• Doctrine of Restitution – Restoring a person to the position they would have been in before suffering a financial loss due to wrongful retention of money.
• Principle of Unjust Enrichment – Preventing one party from unfairly benefiting at another’s expense.
• Union of India v. Tata Chemicals Ltd. (2014) 6 SCC 335 – Confirming the right to interest when money is wrongfully retained.

Significance of the Judgment

• Reinforces that interest is a rightful compensation for deprivation of money.
• Prevents unjust enrichment by ensuring that governments and other entities cannot retain money without legal justification.
• Strengthens financial fairness in legal transactions, particularly in cases of refunds and delayed payments.

The Supreme Court upheld the principle that interest must be paid when a person is deprived of their rightful money. The government was obligated to compensate the appellant for the loss of the e-stamp paper, not just by refunding the amount but also by paying interest as a form of restitution. This judgment protects financial rights and ensures that wrongful retention of money does not go unaddressed.

Case Title: DR. POORNIMA ADVANI & ANR. VERSUS GOVERNMENT OF NCT & ANR. 

5). Allahabad High Court : Police Delays in Serving Summons, Executing Orders Disrupt Legal System 

Case Background

The case before the Allahabad High Court dealt with delays in serving summons and executing judicial orders by the police. The issue arose when summons were issued to respondents in a case seeking quashing of a chargesheet, but there was no report on the service of summons.

During the hearing, the Additional Government Advocate present in court could not provide any information about whether the summons had been served. This prompted Justice Manju Rani Chauhan to summon the Superintendent of Police, Fatehpur, to explain why the court’s orders were not followed.

This case highlighted serious inefficiencies in how judicial orders are implemented, leading to delays in legal proceedings.

Issue of the Case

The key questions before the court were:

1. Why were the summons not served on time?
2. Why was there no report on the service of summons?
3. Why were judicial orders not being complied with?
4. Why was there a lack of coordination between the police and the government legal officers?

Court Observations

A bench comprising Justice Manju Rani Chauhan made the following observations:

1. Police Inefficiency Causes Judicial Delays
   • The failure of police officers to promptly serve summons and execute judicial orders slows down the legal system.
   • This inefficiency increases the backlog of cases and causes unnecessary hardship for litigants.
   • Such delays reduce public confidence in the judiciary.
2. Lack of Awareness Among Government Advocates
   • The Government Advocate was unaware of previous court orders related to the case.
   • Due to this lack of awareness, an inadequate affidavit was filed, which did not properly explain the delay.
   • The court noted this as negligence and disregard for judicial orders.
3. Manipulation of Official Documents
   • The affidavit filed on behalf of the Superintendent of Police had been dictated by the Government Advocate.
   • However, the Private Secretary in the Government Advocate’s office changed the name on the first page of the affidavit.
   • The court saw this as a serious violation of procedure and a deliberate manipulation of records.
4. Lack of Responsibility and Institutional Apathy
   • When questioned, the Government Advocate blamed his colleague, the Additional Government Advocate.
   • The court saw this as a refusal to take responsibility for mistakes.
   • The lack of coordination among government legal officers showed a deeper problem of institutional indifference toward judicial orders.
5. Failure to Uphold Rule of Law
   • The role of a Government Advocate is not just procedural but requires them to ensure that legal proceedings are conducted properly.
   • When a high-ranking legal officer fails to follow due process, it damages the credibility of the legal system and sets a bad example for future legal professionals.

Court Rulings and Decision

• The court held that the negligence of the police and government advocates in handling judicial orders cannot be excused.
• Delays in serving summons and improper handling of affidavits undermine the integrity of the justice system.
• The court criticized the Government Advocate’s office for allowing procedural violations and failing to act responsibly.
• It called for immediate corrective action to prevent such issues in the future.

Legal Provisions Applied

• Judicial Authority and Compliance with Court Orders – Courts have the power to ensure that their orders are followed by government officials and police.
• Responsibility of Government Advocates – They are expected to uphold legal integrity and ensure proper execution of judicial directives.
• Institutional Accountability – Government officers, including police and legal representatives, must follow proper procedures and coordinate effectively.

Significance of the Judgment

• Reinforces the need for timely execution of judicial orders to prevent unnecessary delays.
• Holds police and government advocates accountable for their role in the justice system.
• Highlights the importance of procedural integrity and proper documentation in legal proceedings.
• Sends a strong message that disregard for court orders and legal procedures will not be tolerated.

The Allahabad High Court’s ruling strongly criticized the inefficiency of police officers and government advocates, holding them responsible for delays in judicial processes. The court emphasized that failure to serve summons on time, lack of coordination, and manipulation of documents severely affect the justice system and public trust. It called for immediate reforms to ensure better compliance with judicial orders in the future.