Gauhati High Court
Page No.# 1/14 vs Union Of India on 3 April, 2025
Page No.# 1/14
GAHC010067102025
2025:GAU-AS:3994
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : Bail Appln./963/2025
PRABIN JHA
S/O. SRI ARUN JHA @ ARUN KUMAR JHA, R/O. HOUSE NO. 25, KUNDIL
NAGAR, P/S. BASISTHA, GUWAHATI-781029, DIST. KAMRUP (M),
ASSAM.KAMRUP METRO
VERSUS
UNION OF INDIA
REP BY SENIOR INTELLIGENCE OFFICER DIRECTORATE GENERAL OF
GOODS AND SERVICES TAX INTELLIGENCE GUWAHATI ZONAL UNIT
GUWAHATI
Advocate for the Petitioner : MR. D BORA, MR. N MAHAJAN,MR. P K DAS,MR. A
CHAUDHURY,MR. B K MAHAJAN
Advocate for the Respondent : SC, GST,
Page No.# 2/14
BEFORE
HONOURABLE MRS. JUSTICE MITALI THAKURIA
ORDER
Date : 03.04.2025 Heard Mr. H. R. A. Choudhury, learned Senior Counsel assisted by Mr. A. Chaudhury, learned counsel for the petitioner. Also heard Mr. S. C. Keyal, learned Standing Counsel, GST for the respondent/Union of India.
2. This is an application under Section 483 of BNSS, 2023 praying for grant of bail to the accused/petitioner, who has been arrested in connection with Case No. DGGI/INT/INTL/259/2025, under Section 132(5) of the Central Goods & Services Tax Act, 2017.
3. The petitioner side has filed an additional affidavit to bring some documents on record and the respondent side also filed written objection against the prayer for bail.
4. It is submitted by Mr. Choudhury, learned Senior Counsel for the petitioner, that the present accused/petitioner is innocent and he is a businessman by profession having proprietorship of a firm in the name and style M/S Goodwill Traders having GST Registration Certificate and also a law abiding person. Upon receipt of a summon from the investigating agency on 06.03.2025, the petitioner appeared before the authority and on 07.03.2025, he was arrested in connection with this case and since then, he is in judicial custody. As per allegation, he indulged in issuance of fake invoices without actual supply of Page No.# 3/14 goods and thereby passed ineligible ITC of Rs. 30.89 Crores. However, during his entire period in judicial custody, the Investigating Authority did not asked for any police remand nor made any prayer for custodial interrogation. He has been arrested connection with this case merely on suspicion and in a very mechanical manner and without any proper investigation or his involvement in the alleged offence, and accordingly, Mr. Choudhury submitted that it is a fit case wherein the accused/ petitioner may be granted with the privilege of bail.
5. Mr. Choudhury further submitted that though the Central Goods & Services Tax Act, 2017 (in short, 'CGST Act') is a special enactment, but the same is not a complete Code in itself as regards to the provision of search, seizure and arrest and the provision of the Code of Criminal Procedure would equally apply unless expressly or impliedly excluded by the provision of CGST Act. More so, in view of Section 4(2) of Cr.P.C., the procedure prescribed under the Code also applied to special statues unless it is expressly barred or prohibited by the Act itself. In that context, he also relied on a decision of Hon'ble Supreme Court which was reported vide 2025 SCC OnLine SC 449 (Radhika Agarwal Vs. Union of India & Ors.) wherein it has been held that " the GST Acts are not a complete code when it comes to the provisions of search and seizure, and arrest, for the provisions of the Code would equally apply when they are not expressly or impliedly excluded by provisions of the GST Act."
6. Mr. Mahajan further submitted that there is no mention of Document Identification Number (in short, 'DIN') in the arrest memo which is mandatory required as per the Circular No. 122/41/2019-GST, dated 05.11.2019, issued by the Commissioner, GST-Inv and the same shall be treated as invalid and shall be Page No.# 4/14 deemed to have never been issued. In the Grounds of Arrest issued on 07.03.2025 also, it is seen that there is no mention of DIN, although the Arrest Memo dated 07.03.2025, Jama Talashi and Letter dated 07.03.2025 were having their respective DIN numbers, and in absence of DIN numbers in documentation can be considered as a good ground for bail.
7. The learned Senior Counsel for the petitioner also raised the issue that the competent authority by exercising its power under Section 69 of CGST Act having reasons to believe that the accused/petitioner has committed an offence under Section 132(1)(a) of CGST Act and punishable under Section 132(1)(i) of the CGST Act, but the said authorization letter having reason to believe was never furnished to the accused/petitioner so as to enable him to exercise his right of challenging the validity of his arrest whereby the fundamental right of the accused/petitioner is violated. In that context, Mr. Choudhury also relied on paragraph No. 32 of the judgment of Hon'ble Supreme Court in Radhika Agarwal (supra), which reads as under:
"32. The contention of the DoE that while "grounds of arrest" were mandatorily required to be supplied to the arrestee, "reasons to believe", being an internal and confidential document, need not be disclosed, was decisively rejected in Arvind Kejriwal (supra). It was held that "reasons to believe" are to be furnished to the arrestee such that they can challenge the legality of their arrest. Exceptions are available in one-off cases where appropriate redactions of "reasons to believe" are permissible. The relevant portion reads:
"41. Once we hold that the accused is entitled to challenge his arrest under Section 19(1) of the PML Act, the court to examine the validity of arrest must catechise both the existence and soundness of the "reasons to believe", based upon the material available with the authorized officer. It is difficult to accept that the "reasons to believe", as recorded in writing, are not to be furnished. As observed above, the requirements in Section 19(1) are the jurisdictional conditions to be satisfied for arrest, the validity of which can be challenged by the accused and examined by the court. Consequently, it would be incongruous, if not wrong, to hold that the accused can be denied and not furnished a copy of the "reasons to believe". In reality, this would effectively Page No.# 5/14 prevent the accused from challenging their arrest, questioning the "reasons to believe". We are concerned with violation of personal liberty, and the exercise of the power to arrest in accordance with law. Scrutiny of the action to arrest, whether in accordance with law, is amenable to judicial review. It follows that the "reasons to believe" should be furnished to the arrestee to enable him to exercise his right to challenge the validity of arrest.
42. We would accept that in a one-off case, it may not be feasible to reveal all material, including names of witnesses and details of documents, when the investigation is in progress. This will not be the position in most cases. DoE may claim redaction and exclusion of specific particulars and details. However, the onus to justify redaction would be on the DoE. The officers of the DoE are the authors of the "reasons to believe" and can use appropriate wordings, with details of the material, as are necessary in a particular case. As there may only be a small number of cases where redaction is justified for good cause, this reason is not a good ground to deny the accused's access to a copy of the "reasons to believe" in most cases. Where the non-disclosure of the "reasons to believe" with redaction is justified and claimed, the court must be informed. The file, including the documents, must be produced before the court. Thereupon, the court should examine the request and if they find justification, a portion of the "reasons to believe" and the document may be withheld. This requires consideration and decision by the court. DoE is not the sole judge.
43. Section 173(6) of the Code, permits the police officer not to furnish statements or make disclosures to the accused when it is inexpedient in public interest. In such an event, the police officer is to indicate the specific part of the statement and append a note requesting the Magistrate to exclude that part from the copy given to the accused. He has to state the reasons for making such request. The same principle will apply."
8. Citing the said paragraph No. 32 of the aforesaid judgment, it is submitted by Mr. Choudhury that the grounds of arrest are mandatorily required to be supplied to arrestee as well as the reasons to believe so that they can challenge the legality of their arrest.
9. Mr. Choudhury, learned Senior Counsel, further submitted that no proper assessment was undertaken by the concerned Assessing Officer and the Investigating Agency and in a very mechanical and arbitrary manner, the accused/petitioner was arrested without proper determination of tax, cess, Page No.# 6/14 penalty and the interest by the Assessing Authority and imposed an imaginary figure of Rs. 30.89 Crores without proper assessment. More so, considering the maximum punishment under the offence attributed in the instant case, the issuance of Notice under Section 35(3) of BNSS, corresponding to Section 41(A) Cr.P.C., is mandatory as per direction of the Hon'ble Supreme Court passed in the case of Arnesh Kumar Vs. State of Bihar and reiterated in Satender Kumar Antil Vs. CBI, reported in 2022 SCC OnLine SC 825.
10. Mr. Choudhury further raised the issue of non-mentioning of DIN number in 3 (three) documents, namely, Authorization Letter of Arrest, Grounds of Arrest and Arrest Memo. He submitted that in absence of DIN number, a person cannot be arrested and can be considered as a good ground for bail. More so, he submitted that the reasons to believe are also not available in all those documents while issuing the same to the petitioner and thus, the accused/petitioner was not in a position to know as to on what ground he is being arrested in connection with this case, which is mandatorily required to be served on the respondent as per the ratio laid down by the Hon'ble Supreme Court in the case of Radhika Agarwal (supra).
11. It is further submitted by learned Senior Counsel that though it is stated in the objection filed by the respondent side that reasons to believe has been recorded in the file, but those were admittedly not communicated to the present petitioner which reveals from the record and the documents which have been issued to the present petitioner. He further submitted that as the present Act is not a complete Code, the provision of Code of Criminal Procedure has to be followed and in the instant case, it is also seen that no Notice under Section 50 Page No.# 7/14 Cr.P.C., corresponding to Sections 47 & 48 of BNSS, were issued to the present petitioner at the time of his arrest nor the grounds of arrest was being intimated to his family members. In that regard, he also relied on decisions of Hon'ble Supreme Court passed in the cases of Vihaan Kumar Vs. State of Haryana, reported in 2025 SCC OnLine SC 269.
12. Mr. Choudhury further submitted that the learned Additional Session Judge No. 5, Kamrup(M), Guwahati, vide order dated 11.05.2023, passed in Bail Appln. No. 362/2023, had granted bail to an accused only for violation of Section 41/41A of Cr.P.C. considering the view expressed by the Hon'ble Supreme Court in the case of Arnesh Kumar Vs. State of Bihar as well as in the case of Rajesh Kumar Dudani Vs. State of Uttarakhand [2023 SCC OnLine SC 209].
13. It is further submitted that the I.O. got sufficient time for custodial interrogation of the present accused/petitioner as he is behind the bar for last 30 days and the police also did not sought for any police remand or for his interrogation in the jail premises and hence, Mr. Choudhury submitted that further custodial interrogation of the present petitioner may not be required for the interest of investigation. However, the present petitioner is ready and willing to extend his co-operation in further investigation of this case.
14. Mr. Choudhury also submitted that the entire case is based on documentary evidence and during the custodial period of the present petitioner, the Investigating Authority has already recovered all the relevant documents from the possession of the present accused/petitioner and accordingly he submitted that considering all these grounds and also considering the non-
Page No.# 8/14 compliance of the provision of Section 41/41A Cr.P.C., viz-a-viz non-compliance of Sections 47/48 of BNSS, and also considering the non-furnishing of reasons to believe, as recorded by the authority concerned, the bail prayer of the present petitioner may be considered.
15. Mr. Keyal, learned Standing Counsel, GST submitted in this regard that in all the documents, the DIN numbers have been mentioned and there is sufficient compliance of Section 70 of CGST Act, which is corresponding to Section 41A of Cr.P.C. Further he submitted that the reasons to believe has already been recorded by the authority concerned which is in the file. He accordingly produced the record wherefrom it is seen that the reasons to believe has been recorded by the investigating authority. He further submitted that the arrest was also made complying all the necessary formalities as required under Section 69 of the CGST Act and there is no dispute in regards to the compliance of Section 69 of CGST Act at the time of arrest of the present accused/petitioner. He also submitted that the grounds of arrest are also communicated to the present petitioner and in Arrest Memo, the DIN number is also mentioned.
16. In that context, Mr. Choudhury, learned Senior Counsel for the petitioner, submitted that there is no dispute regarding the compliance of proper provision at the time of arrest nor there is any dispute in regards to recording of reasons to believe by the authority concerned, but the only issue raised by the petitioner is that the reasons to believe is not communicated to the present accused/petitioner. More so, he submitted that though in the Arrest Memo the DIN number may be available, but it seems to be incorporated subsequently as Page No.# 9/14 the same is in the form of hand written and in other documents, the DIN number were written in typed form and accordingly, he submitted that admittedly in the Authorization Letter as well as in the Grounds of Arrest, which were communicated to the present accused/petitioner, the DIN numbers are missing.
17. Mr. Keyal, learned Standing Counsel, NCB further submitted that the GST is a complete Code in itself and Section 69 of the CGST Act has endowed powers to order arrest to the Commissioner in matters of commitment of an offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of Section 132 and all the formalities were complied with at the time of the arrest of the accused/petitioner. More so, as stated above, the "reasons to believe" before authorizing the arrest of the petitioner has already been recorded in the file. Further, the grounds of arrest were also communicated to the present petitioner.
18. He further relied on a decision of Hon'ble Telangana High Court passed in Writ Petition No. 4764 of 2019 (P.V. Ramana Reddy Vs. Union of India & Ors.), which was subsequently upheld by the Hon'ble Supreme Court, wherein it was observed that "CGST Act, 2017 is a complete code in itself in respect of (1) the acts that constitute offences, (2) the procedure for prosecution and (3) the punishment upon conviction, then the power of Commissioner, who is not a Police Officer, to order the arrest of a person should also emanate from prescription contained in the Act itself. Section 69(1) of CGST Act, 2017 very clearly delineates the power of the Commissioner to order the arrest of a person whom he has reasons to believe, to have committed an Page No.# 10/14 offence which is cognizable and non-bailable."
19. Mr. Keyal further submitted that the present case is also considered to be an economic offence and hence it has to be viewed with a different approach while dealing with the matter of bail. In that context, he also relied on a judgment of Hon'ble Supreme Court passed in the case of Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation (Criminal Appeal No. 730 of 2013) and emphasized on paragraph Nos. 15 & 16 of the judgment, which reads as under:
"15) Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.
16) While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations."
20. He further submitted that the petitioner engaged in issuance of fake invoices with the help of allies, namely, Shri Prince Jain, Shri Rahul Yadav and Shri Shubam Jain. Accordingly, he submitted that it is not at all a fit case to consider the bail application of the present petitioner only on the ground of his detention and the illness. His further custodial interrogation will be required for the proper investigation of this case and if the petitioner is released on bail at this stage, there may be probability of hampering or tampering with the investigation of this case.
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21. After hearing the entire submissions made by the learned counsels for both sides, I have also perused the case record and the annexures filed along with the petition and the record which was produced by the respondent authorities.
22. It is seen that there is no dispute in regards to the Arrest Memo issued by the respondent authorities by complying all necessary formalities under Section 69 of the CGST Act. But it is the issue raised by the petitioner that there was no proper compliance of Section 41/41A of Cr.P.C. which are mandatorily required to be followed. From the view expressed by the Hon'ble Supreme Court in case of Radhika Agarwal (supra), it is evident that though the CGST is a special enactment, but the same cannot be considered as a complete Code in itself as regards to the provision of search, seizure and arrest and as stated above, the provision of Code of Criminal Procedure would be applicable unless it is expressly or impliedly barred by the provision of the said Act. But, here in the instant case, it is seen that there is no compliance of Section 41/41A of Cr.P.C., which is mandatorily required to be followed as per the guideline of Hon'ble Supreme Court in the cases of Arnesh Kumar Vs. State of Bihar and reiterated in Satender Kumar Antil Vs. CBI. More so, there was also no compliance of Sections 47/48 of BNSS at the time of arrest made by the respondent authorities which is in violation of Article 21 & 22(1) of the Constitution of India and the ratio laid down by the Hon'ble Supreme Court in the cases of Vihaan Kumar Vs. State of Haryana, reported in 2025 SCC OnLine SC 269, and Prabir Purkayastha Vs. State (NCT of Delhi), reported in (2024) 8 SCC 254.
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23. It is also an admitted position that in the Authorization Letter as well as Grounds of Arrest, which were communicated to the accused/petitioner, the DIN numbers are missing, though in the Arrest Memo, the DIN number was incorporated in the hand written form, which was allegedly inserted subsequently. But, as per the Circular No. 122/41/2019-GST, dated 05.11.2019, issued by the Commissioner, GST-Inv, the Arrest Memo and the other documents, which are to be supplied to the accused/petitioner, the DIN number has to be incorporated otherwise it shall be deemed to have never been issued.
24. Coming to the communication of "reasons to believe", it is seen that admittedly the "reasons to believe" was duly recorded in the file at the time of issuing Authorization Letter of Arrest. It is also an admitted fact that it is an internal and confidential document when the arresting authority will record their "reasons to believe" before issuing any Authorization Letter. But, as per the view expressed by the Hon'ble Apex Court in the case of Radhika Agarwal (supra), it can be held that "reasons to believe" are to be furnished to the arrestee so that they can challenge their legality of their arrest. But, here in the instant case, though the "reasons to believe" is found to be duly recorded by the authority concerned, but the same was not communicated to the present accused/petitioner at the time of his arrest or while furnishing the ground of arrest. Thus, it is seen that there is no compliance of Section 41/41A Cr.P.C., viz- a-viz the Grounds of Arrest, was also not communicated which are mandatorily required to be furnished and in the same time, the "reasons to believe", as recorded by the authority concerned, was also not communicated to the present accused/petitioner which may be a grounds for consideration of bail.
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25. It is also seen that the accused/petitioner is in custody for last 29/30 days and thus, the I.O. got sufficient opportunity to interrogate the accused/petitioner keeping him in custody.
26. In view of the entire discussions made above and also considering the views expressed by the Hon'ble Apex Court in the case laws referred to hereinabove and further considering the fact that there is sufficient progress in the investigation of the case and most of the relevant documents are also found to be collected by the I.O. during investigation, I find that further custodial interrogation of the present petitioner may not be necessary for the interest of investigation and therefore, I find it a fit case to extend the privilege of bail to the accused/ petitioner.
27. Accordingly, it is provided that on furnishing a bond of Rs. 50,000/- (Rupees fifty thousand) only with one surety of like amount to the satisfaction of the learned Chief Judicial Magistrate, Kamrup(M), Guwahati, the accused/petitioner, namely, Prabin Jha, be enlarged on bail, subject to the following conditions:
(i) that the petitioner shall fully co-operate in the investigation of the case and shall appear before the Investigating Officer as and when required in connection with the investigation of the aforesaid P.S. Case;
(ii) that the petitioner shall not, directly or indirectly, make any Page No.# 14/14 inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer; and
(iii) that the petitioner shall not leave the jurisdiction of the learned Chief Judicial Magistrate, Kamrup(M), Guwahati, without prior permission.
28. In terms of above, this bail application stands disposed of.
JUDGE Comparing Assistant