Introduction
In Indian jurisprudence, the principle of ‘presumption of innocence’—that one is considered innocent until proven guilty—is a cornerstone of justice. This philosophy, rooted in the maxim that it is better for the guilty to be acquitted than for one innocent person to be wrongly convicted, underpins various safeguards for the accused enshrined in the Criminal Procedure Code, 1973 (‘CrPC’), and the Constitution of India (‘Constitution’). Notably, a. 20(3) of the Constitution asserts that no person accused of any offence shall be compelled to be a witness against themselves, a protection further reinforced by ss. 161 and 162 of the CrPC.
However, these safeguards face significant challenges when juxtaposed with provisions in special statutes such as the Central Goods and Services Tax Act, 2017 (‘CGST Act’), the Prevention of Money Laundering Act, 2000 (‘PMLA’), and the Customs Act, 1962 (‘Customs Act’). These Acts include provisions that potentially encroach on fundamental protections, especially against self-incrimination, creating conflicts with established principles. This article explores the evidentiary value of these contentious provisions, particularly within the Customs Act and the CGST Act, and their potential conflicts with the established principle of protection against self-incrimination. The discussion extends to understanding how statements recorded under these acts are treated in courts, setting the stage for a deeper exploration of ss. 70 and 136 of the CGST Act, and ss. 108 and 138B of the Customs Act.
Interpretation of Relevant Provisions under the CGST & Customs Acts
S. 70 of the CGST Act empowers the proper officer to summon any person whose attendance is considered necessary to give evidence or produce documents during an inquiry. The proceedings under this section are deemed judicial proceedings within the meaning of ss. 193 and 228 of the Indian Penal Code, 1860 (‘IPC’). Furthermore, s. 136 of the CGST Act deals with the admissibility of statements made and signed in response to summons issued under s. 70. Such statements are considered relevant for prosecution if the person who made the statement is dead, cannot be found, is incapable of giving evidence, or if their presence cannot be obtained without unreasonable delay or expense. Correspondingly, s. 108 of the Customs Act aligns with s. 70 of the CGST Act, and s. 138B of the Customs Act mirrors s. 136 of the CGST Act.
These provisions ensure that officers can gather necessary information during inquiries, treat these proceedings as judicial in nature, and use statements as evidence under specific circumstances, even when direct testimony is not possible. This means that such statements can be used to verify the facts they assert, even if the person who made the statement is not available to prove its veracity. The key takeaway from these provisions is that statements recorded under ss. 70 and 108 hold significant evidentiary value. They are treated as part of judicial proceedings, which means they are considered reliable and credible. Ss. 136 and 138B further reinforce this by allowing these statements to be used as evidence in prosecutions under specific circumstances. However, the admissibility and relevance of these statements are not straightforward; they are subject to specific safeguards within each act designed to protect the rights of the summoned individuals to some extent.
Scrutinising the Value & Weight of Statements
In one of the earliest judgments on this issue, the Bombay High Court in Mulchand Sampatraj Shah[i] emphasised that since statements recorded under s. 108 of the Customs Act are considered part of judicial proceedings; the individual making them is legally bound to tell the truth, akin to giving testimony on oath in court. The High Court noted that such statements have a higher evidentiary value compared to statements given to the police because customs officers have specific statutory powers in this regard. The Supreme Court made similar observations in the 1995 case of GTC India[ii].
In Hi-Tech Abrasives[iii], the Chhattisgarh High Court held that for a statement to be treated as relevant and admissible, mere recording is not enough; there must be a fully conscious application of mind by the Adjudicating Authority (AA) that the statement is required to be admitted in the interest of justice. If such a statement is treated as relevant and admissible without verifying the contingencies under s. 136(a) or without examining the maker of the statement as a witness, the entire proceedings shall amount to circumventing the statutorily laid down procedure of law, vitiating the whole prosecution or adjudication process. This stance, reflecting a commitment to ensuring that evidence is gathered and used in a manner that respects legal norms and the rights of individuals involved in legal proceedings, has also been affirmed by the Punjab & Haryana and Allahabad High Courts[iv], which stated that if the procedure prescribed by law is not followed, reliance on such statements must be regarded as misguided. They would not be relevant in proving the truth of the contents thereof.
In this light, it is interesting to examine certain sections of the Indian Evidence Act, 1872 (‘Evidence Act’) and their interplay with constitutional protections. Ss. 24, 25, and 26 of the Evidence Act set critical standards for the admissibility of confessions in criminal proceedings, which seem to contrast sharply with the provisions under discussion. Additionally, a. 20(3) of the Constitution fortifies these protections by granting an accused the right against self-incrimination. However, these protections are significantly challenged under the said provisions, which place individuals in a precarious position by considering statements as substantive evidence that are taken without providing the summoned individual with traditional legal safeguards.
Furthermore, inquiries under the said provisions are deemed judicial proceedings as per ss. 193 and 228 of the IPC, imposing a legal obligation on the person summoned to appear and truthfully state what they know. Failure to respond can lead to prosecution under s. 228 IPC for refusal to answer and providing false evidence can attract liability under s. 193 IPC for giving false evidence in a judicial proceeding. Essentially, individuals summoned under these provisions face a statutory compulsion to speak, which puts them in a dilemma. As far back as 1971, the Supreme Court, in Percy Rustam Basta[v], held that an officer under s. 108 of the Customs Act is not a police officer, and a person making a statement under the said provision is not an accused; hence, the essential ingredient to attract s. 24 of the Evidence Act – namely, that an accused person must confess – is lacking. The Supreme Court further observed that even if there was inducement or threat, the appellant had no basis for supposing that by making the statement, he would gain any advantage or avoid any evil with reference to the proceedings being conducted by the customs officers. Therefore, s. 24 of the Evidence Act was held to have no application.
Judicial Stance & Perspective
In discussing the evidentiary value of statements, it is essential to consider the judicial perspective, particularly as highlighted in the landmark case of Vijay Madan Lal Choudhary v. Union of India[vi]. In this pivotal judgment, the Supreme Court upheld the validity of s. 50 of the PMLA, articulating specific justifications for these provisions, which are analogous to the provisions under discussion. It is noteworthy that identical observations were already made by the Supreme Court in 1971 (supra).
Stage of Proceedings: The Supreme Court noted that when these provisions are invoked, no formal accusation against the person is made; it is simply a stage of summoning. Consequently, the protections under a. 20(3) of the Constitution and s. 161 of the CrPC, reserved for the ‘accused’, are not applicable. Similarly, statements recorded under these provisions are distinct from those recorded under s. 161 of the CrPC, exempting them from the purview of s. 162 of the CrPC.
Role of Officers: The officers authorised to record statements under these provisions are not classified as police officers. Therefore, the constitutional protection against self-incrimination under a. 20(3) of the Constitution and the inadmissibility of confessions to police officers under s. 25 of the Evidence Act do not apply.
Concept of Compulsion: The Supreme Court addressed the issue of compulsion, observing that this concern arises only when the individual is deemed an ‘accused.’ Since the individuals at this stage of the process are not accused, the argument of compulsion is irrelevant. Additionally, the Court noted that imposing legal penalties for non-compliance does not constitute compulsion under a. 20(3) of the Constitution. The Court further emphasised that ‘compulsion’ is a matter of fact to be determined at the trial stage and cannot be generalised.
Credibility of Process: The Supreme Court highlighted that the power to record statements and call for documents is entrusted to officers of a higher rank, which lends credibility to the process and ensures a more reliable and responsible application of these provisions.
This judgment plays a pivotal role in shaping the interpretation, application, and scope of all such provisions in special statutes. It provides the legal rationale that distinguishes such provisions from traditional safeguards contained in the CrPC. However, it also raises questions about the extent to which these justifications align with broader principles of fairness, particularly considering the rights and protections enshrined in the Constitution and the Evidence Act.
While the legal sustainability of the said provisions has been upheld in a series of cases[vii], their practical implications on the rights of the summoned individual warrant closer examination. A notable instance is the judgment in Naresh J Shukawani v. Union of India[viii], wherein the Supreme Court observed that statements made before customs officials could be treated as substantive evidence linking the accused to violations of the relevant act.
Concerns persist about the real-world dynamics of investigations conducted by special agencies. Individuals summoned may feel coerced into making statements due to perceived threats or inducements, even in the absence of explicit coercion. This situation raises serious doubts about the voluntariness of such statements and their potential misuse. The inherent pressure in these investigative environments, combined with the legal ramifications of the concerned provisions, creates a situation where the summoned individual might feel compelled to speak, in direct tension with their constitutional right against self-incrimination.
Defences & Limitations: Evaluating the Use of Statements in Court
The complexities surrounding the admissibility of statements under s. 70 read with s. 136 of the CGST Act, and s. 108 read with s. 138B of the Customs Act necessitate an analysis of the defences available to the person summoned. Key defences involve examining the limitations and conditions of using such statements in court.
Voluntariness and Coercion: Statements must be made voluntarily; if obtained under coercion, duress, or undue influence, their admissibility can be challenged. This defence was exemplified in the case of Duncan Agro Industries[ix], where the Supreme Court emphasised that statements recorded under s. 108 of the Customs Act must undergo rigorous scrutiny, similar to confessions made to non-police personnel. The Court highlighted that for an inculpatory statement to be admissible, it must withstand the tests of voluntariness and genuineness as prescribed in s. 24 of the Evidence Act. If compromised by coercion, it is rendered inadmissible in criminal proceedings. This is quite the opposite of what the Supreme Court stated in its abovementioned decisions. However, the facts of each are peculiar. As held in Mahendra Kumar Singhal[x], the onus lies on the prosecution to demonstrate that the confession was voluntary and not a product of coercion.
Due Process: The recording of statements must adhere to due process, ensuring that the individual is aware of their rights and the implications of their statements.
Relevancy and Admissibility: Under ss. 136 of the CGST Act and 138B of the Customs Act, statements are admissible only if the person who made the statement cannot be secured for reasons specified in the provisions. This means that the statements are not automatically admissible and must meet specific criteria.
Judicial Scrutiny: Courts have the discretion to scrutinise the circumstances under which a statement was made. The court may exclude it from evidence if doubts arise regarding its authenticity or voluntariness.
Confession v. Information: Statements made under these provisions are not considered confessions but information to aid the investigation. This distinction is important because confessions have stricter admissibility rules.
Cross-examination: If the person who made the statement is available, they can be cross-examined, which allows the defence to challenge the credibility and reliability of the statement and clarify the facts stated therein. However, the right to cross-examine is not expressly provided under s. 136 of the CGST Act and s. 138B of the Customs Act, which is a significant limitation.
Corroboration: Statements recorded under these provisions often require corroboration with other pieces of evidence.
Additionally, summoned individuals can retract, which can be based on various grounds, including those delineated in s. 24 of the Evidence Act. Judicial precedents have established that if a confessional statement is retracted, it can only lead to a conviction if independently corroborated by other substantial evidence. This principle was evident in the case of Deora Wires N. Machines[xi], where the Court dismissed orders based solely on promptly retracted confessional statements lacking independent corroborative evidence. The Gujarat High Court, while highlighting the necessity for independent corroboration of retracted statements, also recognised that relying solely on retracted statements without corroboration violates the principles of natural justice and can lead to unjust outcomes.
Additionally, the Delhi High Court in CCE, Delhi-I v. Vishnu & Co Pvt. Ltd.[xii] held that the reliability of a statement, rather than its mere admissibility, becomes questionable once it is retracted, even if the retraction occurs after a significant period. The Court posited that a retracted statement, in the absence of independent corroborative evidence, cannot safely be relied upon as substantive proof. This position emphasises that the burden shifts to the department to prove the validity of the statement post-retraction.
These legal perspectives highlight the importance of evaluating the voluntariness and reliability of statements made under these provisions. As courts have pointed out in various judgments, this serves as a judicial safeguard against the potential misuse of such statements in criminal proceedings[xiii].
Recent Trends: A Shift towards Reluctance
Recent judicial trends indicate a growing reluctance to rely solely on inculpatory statements made under s. 108 of the Customs Act, marking a significant shift in the interpretation and application of these provisions. A notable instance of this evolving judicial stance is evident in the case of Union of India v. Kisan Ratan Singh[xiv]. In this case, Hon’ble Justice Mr. K. R. Shriram of the Bombay High Court offered a critical observation that underscores the necessity of corroborating evidence beyond the statements recorded under s. 108. He poignantly questioned the very essence of a fair trial by stating:
“If I have to simply accept the statement recorded under s. 108 as gospel truth and without any corroboration, I ask myself another question, as to why should anyone then go through a trial. The moment the Customs authorities recorded the statement under s. 108, in which the accused has confessed about his involvement in carrying contraband gold, the accused could be straightaway sent to jail without the trial court having recorded any evidence or conducting a trial.”
This reflection by Justice Shriram highlights the inherent risks in accepting uncorroborated statements as conclusive evidence. It emphasises the principle that a mere confession under such provisions should not obviate the need for a comprehensive trial, where evidence is scrutinised thoroughly. This perspective aligns with the fundamental tenets of justice, ensuring that convictions are based on a holistic examination of all evidentiary aspects rather than solely on the statements recorded under these specialised provisions.
Conclusion
Applying these provisions raises significant concerns about potential violations of the summoned person’s right against self-incrimination and other safeguards under the CrPC. It is a recognised reality that individuals making statements before authorities under these provisions often do so without a sense of comfort or voluntariness. This discomfort is particularly troubling given that, despite the potential lack of free will, these statements can still be used against the summoned person. Therefore, the judiciary is responsible for meticulously scrutinising any confessional statement made under such circumstances.
To balance the rights of the summoned individuals with law enforcement needs, courts should treat these statements primarily as tools for investigations rather than conclusive evidence against the summoned individual. This approach would protect the summoned individual’s rights while aiding investigations and maintaining its sanctity. Further, what is needed is a legislative intervention to navigate a middle path that respects both the interests of the summoned and investigating authorities. Courts will likely continue facing a barrage of retraction applications without such adjustments. This situation arises from a legal impasse where the authorities continue to initiate proceedings based on statements obtained under these provisions. At the same time, the summoned individuals feel powerless and retract their statements, raising concerns about their voluntariness and reliability.
The current legal landscape, therefore, calls for a nuanced approach that acknowledges the necessity of effective investigation while simultaneously upholding the fundamental rights of individuals. Achieving this balance would not only enhance the credibility of legal proceedings but also ensure adherence to the principles of justice and fairness. Without this equilibrium, the legal system risks perpetuating a cycle of contention and retraction, undermining both the efficacy of law enforcement and the protection of individual rights.
End Notes
[i] Mulchand Sampatraj Shah v. Dayashankar, Assistant, 1988 (35) ELT 458 Bom..
[ii] UOI & Anr. v. GTC India & Ors., SLP(C) No. 2183/1994 dated 03.01.1995
[iii] M/s Hi-Tech Abrasives Ltd. v. CCE, High Court of Chhatisgarh, TAXC 54/2017 on 04.07.2018.
[iv] Jindal Drugs Pvt Ltd & Anr. v. UOI & Anr., 2016-TIOL-1230-HC-P&H-CX; CCE v. Parmarth Iron Pvt Ltd., 2010 (250) ELT 514 (All).
[v] Percy Rustomji Basta v. State of Maharashtra, 1971 (1) SCC 847.
[vi] 2022 SCC OnLine SC 929.
[vii] Superintendent of Customs & Central Excise v. R Sunder, 1993 Cri LJ 956; Veera Ibrahim v. State of Maharashtra, (1976) 2 SCC 302; Ramesh Chandra Mehta v. State of West Bengal, AIR 1970 SC 940; Assistant Collector of Central Excise, Rajamundry v. Duncan Agro Industries Ltd., (2000)7 SCC 53.
[viii] 1996 (83) E.L.T. 258 (SC).
[ix] Assistant Collector of Central Excise, Rajamundry v. Duncan Agro Industries Ltd., JT 2000 (8) SC 530.
[x] DRI v. Mahendera Kumar Singhal, 2016 (333) ELT (250) (Del).
[xi] Commr. Of C. Ex., Ahmedabad-III v. Deora Wires N. Machines Pvt. Ltd., 2016 (332) ELT 393 (Guj).
[xii] 2016 (332) ELT 793 (Del).
[xiii] Vinod Kumar Sahdev v. UOI, 2009 (4) JCC 2636; Abid Malik v. UOI, 2009 (5) AD (Delhi) 749; Harpreet Singh Bahad v. DRI, Bail App. 2211/08 decided on 23.09.2009; Vikas Mohan Singhal v. DRI, 2009 (243) ELT 507 (Del).
[xiv] 2020 SCC OnLine Bom 39.
Authored by Shivam Mishra, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinions