By B N Gururaj
ARREST and prosecution of an accused is a very common feature of criminal law. This is at least true of offences classified under the Cr.P.C as cognizable offence. But, in strict sense, the two need not go hand in hand. One may be prosecuted by initiating private complaint under section 200 of Cr.P.C. Similarly, under
most economic legislations, initiation of prosecution by filing private complaint in the Special Courts of Economic Offences is the common practice.
The power of the State to arrest in matters of fiscal offences is a draconian power. The Central Excise Act and the Customs Act have the rather dubious distinction of conferring this special power on the officers under the said Acts. One is bound to wonder that when the Income Tax law, State Sales Tax laws can manage, survive and thrive without this power, why should the officers under the above two Acts enjoy this special power. Now, even service tax law contains the provision for prosecution of offenders. But, section 83 of the Finance Act, 1994, which invokes various provisions of the Central Excise Act, for the purpose of service tax law does not invoke section 13, which is the repository of power of arrest. Perhaps, it might be understandable that in respect of offences under the Customs Act, occasionally, criminal elements may be involved and hence, the officers must have power to apprehend the offender, give hot chase or fire at them. But, one fails to understand, why the power of arrest is necessary at all under the Central Excise Act, which deals with the manufacturers who have a specific place of business, have assets and cannot disappear like criminals and small traders overnight.
Commonly, arrest would be necessary if the investigating officer is of the opinion that the offender may abscond and thereby hamper the investigation. A person may be arrested if he is evading summons and refuses to co-operate in the investigation. If the court orders remand of arrested person to the custody of investigators, they can interrogate the person and elicit information and evidence. But, very often, a person is arrested and produced before the court more in a show of power than out of any necessity.
Frequently, this power of arrest is exercised or threatened to be exercised for recovery of dues even before a show-cause notice is issued to the tax payer. The horrifying image of living in the squalor of Indian jails is enough to persuade anyone to sell his shirt and pay the tax dues. That this power of arrest is misused now and then cannot be in doubt. Most professionals who practice in this field are aware of instances.
Section 13 of the Central Excise Act, 1944 and notifications issued thereunder also lack clarity as to who should exercise the power and who should authorise the exercise of such power of arrest. For instance, section 13 of the Central Excise Act, which was amended by section 141 of the Finance Act, 2003 empowers any Central Excise officer `not below the rank of' Inspector to arrest a person with the prior approval of the Commissioner of Central Excise.
On the other hand, Notification No 9/1999-CE (NT), dated 10.2.1999 authorises arrests by two classes of officers:
A. Any Central Excise officer not below the rank of an Assistant Commissioner or Deputy Commissioner of Central Excise can arrest.
B. An officer below the above ranks may arrest if authorised in writing by the Assistant Commissioner or the Deputy Commissioner.
The latter portion of the notification is prima facie contrary to amended section 13. When the power of approval of arrest is conferred on the Commissioner, he alone can exercise that power. The Central Government has slept over the issue and has not cared to amend the notification, even many years after the amendment of section 13.
It is also not clear whether this prior approval be on a file in the form of a note, or in the form of an arrest warrant. No procedures have been laid down in the public domain. However, as a matter of prudence, any order of arrest must be in writing so as to satisfy the courts that due process of law has been followed. It is far too important a matter to be left to the verbal diktats of the Commissioners. In fine, the vagueness of the nature of prior approval itself is sufficient to raise issues about the manner of exercise of power of arrest or power of prior approval. With this vagueness of law, how does a citizen know whether the person threatening him with arrest is merely bluffing or is actually authorised to execute the threat?
One may go through any law report to find out what is the rate of conviction under the Customs or the Central Excise Act. There are hardly any cases worth discussing. They are so few and far between, especially for Central Excise law which has been in force for nearly seventy years. Power of arrest had not improved the conviction rate in any manner.
Depriving the citizen of his freedom of movement is not a matter internal to the Customs and Central Excise departments. Since these departments are not as highly visible to the public as the Police department or other security forces, their abuse of power goes unnoticed and unchecked. It is an unwanted and unwarranted power, which hangs as a sword of Damocles on the head of taxpayers.
In my view, this power is a relic from the British days, when these officers acted more like police than revenue officers. This guess is buttressed by the fact that the Central Excise officers are supposed to wear khaki uniform even this day. Such power is anachronistic in a democratic republic and deserves to be done away with.
ARREST and prosecution of an accused is a very common feature of criminal law. This is at least true of offences classified under the Cr.P.C as cognizable offence. But, in strict sense, the two need not go hand in hand. One may be prosecuted by initiating private complaint under section 200 of Cr.P.C. Similarly, under
most economic legislations, initiation of prosecution by filing private complaint in the Special Courts of Economic Offences is the common practice.
The power of the State to arrest in matters of fiscal offences is a draconian power. The Central Excise Act and the Customs Act have the rather dubious distinction of conferring this special power on the officers under the said Acts. One is bound to wonder that when the Income Tax law, State Sales Tax laws can manage, survive and thrive without this power, why should the officers under the above two Acts enjoy this special power. Now, even service tax law contains the provision for prosecution of offenders. But, section 83 of the Finance Act, 1994, which invokes various provisions of the Central Excise Act, for the purpose of service tax law does not invoke section 13, which is the repository of power of arrest. Perhaps, it might be understandable that in respect of offences under the Customs Act, occasionally, criminal elements may be involved and hence, the officers must have power to apprehend the offender, give hot chase or fire at them. But, one fails to understand, why the power of arrest is necessary at all under the Central Excise Act, which deals with the manufacturers who have a specific place of business, have assets and cannot disappear like criminals and small traders overnight.
Commonly, arrest would be necessary if the investigating officer is of the opinion that the offender may abscond and thereby hamper the investigation. A person may be arrested if he is evading summons and refuses to co-operate in the investigation. If the court orders remand of arrested person to the custody of investigators, they can interrogate the person and elicit information and evidence. But, very often, a person is arrested and produced before the court more in a show of power than out of any necessity.
Frequently, this power of arrest is exercised or threatened to be exercised for recovery of dues even before a show-cause notice is issued to the tax payer. The horrifying image of living in the squalor of Indian jails is enough to persuade anyone to sell his shirt and pay the tax dues. That this power of arrest is misused now and then cannot be in doubt. Most professionals who practice in this field are aware of instances.
Section 13 of the Central Excise Act, 1944 and notifications issued thereunder also lack clarity as to who should exercise the power and who should authorise the exercise of such power of arrest. For instance, section 13 of the Central Excise Act, which was amended by section 141 of the Finance Act, 2003 empowers any Central Excise officer `not below the rank of' Inspector to arrest a person with the prior approval of the Commissioner of Central Excise.
On the other hand, Notification No 9/1999-CE (NT), dated 10.2.1999 authorises arrests by two classes of officers:
A. Any Central Excise officer not below the rank of an Assistant Commissioner or Deputy Commissioner of Central Excise can arrest.
B. An officer below the above ranks may arrest if authorised in writing by the Assistant Commissioner or the Deputy Commissioner.
The latter portion of the notification is prima facie contrary to amended section 13. When the power of approval of arrest is conferred on the Commissioner, he alone can exercise that power. The Central Government has slept over the issue and has not cared to amend the notification, even many years after the amendment of section 13.
It is also not clear whether this prior approval be on a file in the form of a note, or in the form of an arrest warrant. No procedures have been laid down in the public domain. However, as a matter of prudence, any order of arrest must be in writing so as to satisfy the courts that due process of law has been followed. It is far too important a matter to be left to the verbal diktats of the Commissioners. In fine, the vagueness of the nature of prior approval itself is sufficient to raise issues about the manner of exercise of power of arrest or power of prior approval. With this vagueness of law, how does a citizen know whether the person threatening him with arrest is merely bluffing or is actually authorised to execute the threat?
One may go through any law report to find out what is the rate of conviction under the Customs or the Central Excise Act. There are hardly any cases worth discussing. They are so few and far between, especially for Central Excise law which has been in force for nearly seventy years. Power of arrest had not improved the conviction rate in any manner.
Depriving the citizen of his freedom of movement is not a matter internal to the Customs and Central Excise departments. Since these departments are not as highly visible to the public as the Police department or other security forces, their abuse of power goes unnoticed and unchecked. It is an unwanted and unwarranted power, which hangs as a sword of Damocles on the head of taxpayers.
In my view, this power is a relic from the British days, when these officers acted more like police than revenue officers. This guess is buttressed by the fact that the Central Excise officers are supposed to wear khaki uniform even this day. Such power is anachronistic in a democratic republic and deserves to be done away with.
No comments:
Post a Comment