These instructions come as a relief to the employees of the Companies, wherein the department is instructed not to make arrest/prosecution in a routine and mechanical manner, as was the case earlier. Providing utmost importance to “mens rea” along with fulfillment of various other conditions to lead to the arrest/ prosecution of a person, ensures a check on the otherwise unfettered and wide powers of the tax authorities. This is also supported by various judicial precedents4 under the erstwhile regime wherein it is observed that mere suspicion, however strong it may be, cannot be substituted for strong proof/evidence. Requirement of strong evidence is given utmost importance to levy penalty to the officials/ relevant employees of the firm.
Source Mondaq
