Page No.# 1/15 GAHC010192602025 2025:GAU-AS:11998 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : Bail Appln./2787/2025 GAURAV AGARWAL S/OP SURESH AGARWAL R/O 16C SHANGRI LA TOWERS GAMES VILLAGE BORSOJAI LALMATI GUWAHATI 781029 VERSUS THE UNION OF INDIA AND ORS REP BY THE DIRECTORATE GENERAL OF GOODS AND SERVICES TAX GUWAHATI ZONAL UNIT HN 77 RUPKONWAR JYOTIPRASAD AGARWALA ROAD PANJABARI GUWAHATI 2:THE ADDITIONAL DIRECTORATE GENERAL OF GOODS AND SERVICES TAX GUWAHATI ZONAL UNIT HN 77 RUPKONWAR JYOTIPRASAD AGARWALA ROAD PANJABARI GUWAHATI 3:THE SENIOR INTELLIGENCE OFFICER DIRECTORATE GENERAL OF GOODS AND SERVICES TAX GUWAHATI ZONAL UNIT HN 77 RUPKONWAR JYOTIPRASAD AGARWALA ROAD PANJABARI GUWAHATI 2 Advocate for the Petitioner : MS. M L GOPE, MR. D SAIKIA,MS. N HAWELIA,MR S K SAHA,MS S SARKAR Advocate for the Respondent : SC, DRI, Page No.# 2/15 BEFORE HONOURABLE MR. JUSTICE MRIDUL KUMAR KALITA ORDER 04.09.2025 1. Heard Mr. Devajit Saikia, the learned Senior Counsel, assisted by Ms. M.L. Gope as well as Ms. N. Hawelia, the learned counsel for the petitioner. Also heard Mr. S.C. Keyal, the learned Standing Counsel, Directorate General of Goods and Services Tax Intelligence (DGGI). 2. This application under Section 483 of BNSS, 2023 has been filed by the petitioner, namely, Gaurav Agarwal, who has been detained behind the bars since 20.08.2025 in connection with the Case No. DGGI/INV/Case No. 118/2025 (Part-3) relating to File No. DGGI/INV/118/2025-Gr C- O/o ADG-DGGI-ZU- GUWAHATI- Part(3). 3. The facts relevant for consideration of the instant bail application, in brief, are that on receipt of an information through reliable sources that some persons are indulging in tax evasion on supply of coke, the Joint Director, DGGI Guwahati Zonal Unit, authorised a search of the residence of the petitioner which is located at 16th floor, Shangri La Towers, Games Village, Borsajai, Lalmati, Guwahati, on 18.08.2025. 4. During search operation, conducted on 19.08.2025, in the residence of the petitioner, a mobile handset and a laptop were seized and Panchnama was drawn and thereafter, the petitioner was summoned by the officials of the DGGI under Section 70 of the CGST Act, 2017. 5. It is alleged that the petitioner is a part of a syndicate which provides fake invoices to coal suppliers to enable them to supply of coal from Assam to Page No.# 3/15 Bihar without payment of GST & Coal Cess. It is also alleged that the petitioner provides fake invoices in the name of non-existing firms to these coal traders and E-way bills were shown to have been issued by these fake firms for smooth movement of coal without payment of GST. 6. It is also alleged that the tax evasion, by taking recourse of issuance of such E-way bills, was found to the tune of Rs. 28.95 Crore during the period from March 2023 to May 2025. 7. In this case the petitioner is represented by a team of counsels led by Mr. Devajit Saikia, learned Senior Advocate, who also happens to be the Advocate General of the State of Assam. 8. Mr. S.C. Keyal, learned Standing Counsel, DGGI has raised a preliminary objection in this case regarding appearance of Mr. Devajit Saikia, the learned Senior Counsel for the petitioner, who is one of the accused in Case No. DGGI/INV/Case No. 118/2025 (Part-3) relating to File No. DGGI/INV/118/2025- Gr C- O/o ADG-DGGI-ZU-GUWAHATI- Part (3). 9. Mr. S.C. Keyal, the learned Standing Counsel, DGGI has submitted that as 50% of the tax, which is alleged to have been evaded by the petitioner, would have gone to State Government, hence, defending an accused by the Advocate General of the State, though in the capacity of Senior Advocate, in a case where accusation of GST evasion has been made, involves a conflict of interest, therefore, he submits that Mr. Devajit Saikia, while holding the post of Advocate General, cannot appear in his capacity as Senior Advocate to defend an accused (petitioner) in this case. In support of his submissions the learned Standing Counsel, DGGI has cited a ruling of the Apex Court in the case of “M/S Armour Security (India) Ltd. Vs. Commissioner, CGST” reported in “2025 0 INSC 982”. Page No.# 4/15 10. On the other hand, Mr. Devajit Saikia, the learned Senior Counsel has submitted that the position, status and duties of the Advocate General are defined by Article 165 of the Constitution of India. He submits that Article 165(2) prescribes the duty of the Advocate General to give advice to the Government of the State upon such legal matters and perform such other duties of legal character, as from time to time be referred or assigned by the Governor. 11. He submits that in the instant case, he is defending the petitioner in his capacity as a Senior Advocate as the prosecuting agency in this case is Directorate General of Goods and Services Tax Intelligence (DGGI), which is an instrumentality of the Union Government. The State of Assam has no role in either making the accusation against the petitioner or prosecuting the case against him. 12. He submits that there is no conflict of interest of the State Government of Assam in this case and had it been so, it would have been for the State of Assam to oppose his appearance for the petitioner in this case. However, Mr. Saikia submits that he has obtained the consent of the Government of Assam for appearing in this case. In support of his submissions, the learned Senior Counsel has cited a ruling of the Apex Court in the case of “T.C.Hingorani Vs.G.P.Mishra” reported in “1965 SCC OnLine SC 365”. 13. I have considered the submissions made by counsel for both sides and have gone through the rulings cited by them in support of their submissions on the above-mentioned issue. 14. On perusal of the provisions contained in the Article 165 of the Constitution of India, it appears that the Advocate General of a State holds his office during the pleasure of the Governor of that State. He has to give advice to the government of the State, he also as to perform such other duties of a Page No.# 5/15 legal character as may be assigned to him by the Governor of the State and also has to discharge other functions conferred on him by the provisions of the Constitution of India or any other law in force. 15. I have considered the submissions made by the learned counsel for both sides on the preliminary objection raised by the learned Standing Counsel, DGGI. Though, while holding the post of an Advocate General of the State, an Advocate continues to enjoy his right to practice law, as an Advocate simpliciter, under the provisions of the Advocates Act, 1961, however, if there is a conflict of interest of the State Government in a case where he appears as an Advocate simpliciter for a particular party, the State Government may ask him to not to appear for such a party while he continues to hold the post of the Advocate General of that State. However, in the instant case, the learned Senior Counsel for the petitioner has submitted that he has obtained the consent of the State Government for appearing in this case and the State Government has raised no objection to the same. 16. Moreover, there is no dispute regarding the fact that the central GST is collected by the Central Government and it goes to its coffers, whereas, state GST is collected by the state government and it goes to its coffers. Both taxes are regulated by two different statutes namely, the Central Goods and Services Tax Act, 2017 and the Assam Goods and Services Tax Act, 2017 respectively. Both the statutes provide for penal consequences for contravention of the provision of the respective statutes. 17. In the instant case, the accusation against the petitioner is regarding the contravention of the provisions of Central Goods and Services Tax Act, 2017 and the prosecuting agency in this case is the Union Government through the Directorate General of GST Intelligence, which is an instrumentality of the Page No.# 6/15 Central Government. The prosecution of the petitioner is not under Assam Goods and Services Tax Act, 2017, neither the Government of Assam is the prosecuting agency. There would certainly be a bar for the Advocate General in appearing in a criminal case for an accused where the State Government is the prosecuting agency, however, that is not the case in the instant case. Moreover, the learned Advocate General has claimed to have obtained consent of the State Government for his appearance in this case. As such, this Court is of the considered opinion that there is no bar in Sri Devajit Saikia, learned Senior Counsel appearing for the petitioner in this case as a Senior Counsel, while he continues to hold the post of the Advocate General. 18. Now let us consider the submissions made by the learned counsel for both sides on the merits of this case. 19. The learned Senior Counsel for the petitioner has submitted that in the instant case, formal complaint is yet to be filed by the DGGI against the present petitioner, hence, the proceeding against him is pending at pre-accusation stage. He submits that search of the premises of the petitioner and seizure of his laptop and mobile was made only on the basis of suspicion. 20. The learned Senior Counsel for the petitioner also submits that the petitioner, after receipt of summons from DGGI, has appeared before the Senior Intelligence Officer, DGGI, Guwahati Zonal Unit on 19.08.2025 and has co- operated in the investigation. However, in spite of that, the petitioner was arrested on 20.08.2025 at 3:50 PM. 21. The learned Senior Counsel for the petitioner has submitted that in the authorisation for arrest issued by the Additional Director General, DGGI on 20.08.2025, it is alleged that the petitioner has committed offence under Section 132(1)(a) of the CGST Act, 2017 which is punishable under Sections Page No.# 7/15 132(1)(i) of the said Act. He submits that the punishment prescribed for the alleged offence extends to imprisonment for 5(five) years and with fine, as such, there is a requirement under Section 35(3) of the BNSS, 2023 to issue notice to the petitioner in such case. In support of his submissions, he has cited a ruling of the Apex Court in the case of “Arnesh Kumar Vs. State of Bihar” reported in “(2014)8 SCC 273”. He further submits that before arresting the petitioner in this case, the arresting authority ought to have recorded reasons, in writing, for its satisfaction regarding existence of any of the conditions mentioned in clause (a) to (e) of Section 35 (1)(b)(ii) of BNSS, 2023. However, same has not been done in this case and therefore, he submits that the arrest of the petitioner in this case is illegal and the petitioner is entitled to get bail on that count only. 22. The learned Senior Counsel for the petitioner has also submitted that the arrest of the petitioner in this case has been made in violation of the instructions dated 17.08.2022 No. 02/2022-23 [GST-INV] issued by the CBIC, which lays down the guidelines for arrest and bail in relation to offences punishable under CGST Act, 2017. He submits that as per the said guidelines, the arrest may be made only if the Investigating Officer has reason to believe that the accused will abscond or disobey summons or has failed to cooperate in the investigation, however, in the instant case, the petitioner has complied with the summons issued to him and has fully cooperated in the investigation. As such, there was no occasion for the officials of DGGI to arrest the petitioner in connection with the above-mentioned case. 23. The learned Senior Counsel for the petitioner submits that the summons were issued to the petitioner or to depose verbally and in writing and the petitioner has done so after appearing before the Senior Intelligence Officer, Page No.# 8/15 DGGI in pursuant to the summons. The learned Senior Counsel for the petitioner has also submitted that though Section 69 of the CGST Act, 2017 provides for the power to arrest and empowers the commissioner to arrest a person and if he has reason to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of the said section, however, the existence of power to arrest and necessity to exercise such powers are two different things. 24. He submits that the necessity of exercising the power to arrest has to be justified in pursuant to the provisions contained in Section 35 of BNSS which the arresting authority has failed to do in the instant case and therefore, he submits that the petitioner is entitled to get bail in this case. 25. In support of his submissions, the learned Senior Counsel for the petitioner has cited following rulings:- 1. “Anuj Mahesh Gupta Vs. Asstt. Commissioner of State Tax” reported in “2021 SCC Online Bom 14100;” 2. “Manish Kumar v. Directorate General, Goods & Service Tax Intelligence” reported in “2025 SCC Online P&H 5530;” 3. “Rahul Vs. Director General of Goods and Service Tax Intelligence, Nagpur Zonal Unit, thr. Sr. Intelligence Officer” reported in “2024 SCC Online Bom 262;” 4. “Radhika Agarwal Vs. Union of India (UOI) and Ors.” reported in “2025 INSC 272.” 26. On the other hand, Mr. S. C. Keyal, learned Standing Counsel, DGGI has vehemently opposed the grant of bail to the present petitioner. He submits that Page No.# 9/15 there are sufficient incriminating materials in the records to indicate that the present petitioner is a member of a syndicate which is involved in providing fake invoices to coal suppliers to enable them to supply of coal to Assam and Bihar without payment of GST & Coal Cess. 27. It is submitted by the learned Standing Counsel, DGGI that the petitioner provides fake invoices in the name of non-existing fake firms to the coal traders and these fake firms issue E-way bills without payment of GST. 28. He also submits that the arrest of the petitioner in this case has been made after following all procedural requirements as mandated by the law. He submits that before arrest of the petitioner, the Additional Director General, DGGI, Guwahati Zonal Unit had issued authorization to arrest the petitioner mentioning therein his reason to believe that the petitioner has committed an offence under Section 132(1)(a) of CGST Act, 2017. 29. The learned Standing Counsel, DGGI submits that the petitioner has been arrested in exercise of powers under Section 69 of CGST Act, 2017. He also submits that as the investigation is at initial stage and the petitioner has not revealed all information about the syndicate involved in the commission of the alleged offence, his custodial interrogation is necessary in this case. 30. He also submits that in all cases before effecting an arrest formal order of assessment of the quantum of evasion of tax is not necessary if the department is certain that it is a case of offence under clauses (a) to (d) as well as clause (i) of sub-section (1) to Section 132 of the GST Act, and the amount of tax evaded, etc. falls within clause (i) of sub-section (1) of Section 132 of the GST Act. In support of the submission, the learned Standing Counsel has also cited the ruling of the Apex Court in the case of “Radhika Agarwal Vs. Union of India And Ors.” (supra). Page No.# 10/15 31. The learned Standing Counsel for the DGGI has also submitted that in this case the offence involved is relating to evasion of tax of enormous quantity and such a case involving economic offence constitutes a class apart and needs to be viewed with a different approach in the matter of bail. He submits that the economic offence having deep-rooted conspiracies and involving huge loss to public funds needs to be viewed seriously and considered as grave offence affecting the economy of the country as a whole and thereby posing serious threat to financial health of the country. 32. He submits that while granting bail in such cases Court has to keep in mind the nature of accusations, the nature of evidence in support thereof, severity of punishment which conviction will entail, the character of the accused and the circumstances which are equivalent to the accused and reasonable possibility of securing the presence of the accused and the trial, reasonable apprehension of the witnesses being tampered with, larger interest of public/state and other similar considerations. In support of his submission, the learned Standing Counsel, DGGI has cited a ruling of the Apex Court in the case of “Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation” reported in “AIR 2013 SC1933”. 33. The learned Standing Counsel, DGGI has also submitted that the petitioner has approached this Court directly, under Section 483 of BNSS, after rejection of his bail without first approaching before the Sessions Court. He submits that before approaching this Court, petitioner ought to have exhausted his remedy of filing bail application before the Sessions Court and therefore, he submits that this bail application is not maintainable. In support of his submission, he has cited a ruling of Division Bench of this Court in the case of “Kwmta Gwra Brahma Vs. State of Assam” reported in “2015 2 Gau LT 665.” Page No.# 11/15 34. I have considered the submissions made by the learned counsel for both sides and have gone through the Case Diary/relevant file regarding investigation of this case produced by the learned Standing Counsel, DGGI. I have also gone through the rulings cited by the learned counsel for both sides. 35. It appears that in this case, on the basis of information received through reliable sources and suspecting that the petitioner is involved in evasion of GST, a search operation was authorized and was conducted in the premises of the petitioner. During search operation on 19.08.2025, the laptop and the mobile handset of the petitioner was seized. 36. It also appears that the petitioner was also issued summons under Section 70 of the CGST Act, 2017 for appearing before the Senior Intelligence Officer, DGGI, Guwahati Zonal Unit on 19.08.2025 at about 2:00 PM to depose verbally and in writing. It appears that the petitioner had, in compliance with the summons received by him, appeared before the Senior Intelligence Officer, DGGI. His statements were also recorded by the said Officer. It also appears that in this case, no separate notice under Section 35(3) of BNSS, 2023 was issued to the petitioner. 37. However, while authorizing the arrest of the petitioner under Section 69 of the CGST Act, 2017, the Additional Director General, DGGI, Guwahati Zonal Unit has stated in the memo of authorization for arrest that there is a possibility of the petitioner influencing the witnesses and tampering the evidence and there is also a requirement of his physical presence for timely completion of the investigation, which necessitated the arrest of the petitioner in this case. 38. There is no dispute at the bar that the punishment prescribed for the offence alleged in this case against the petitioner is imprisonment for 5(five) years only as well as with fine. Thus, as per the guidelines of the Apex Court, in Page No.# 12/15 the case of “Arnesh Kumar Vs. State of Bihar” (supra) the necessity of issuance of notice under Section 35 (3) BNSS, 2023 was there in this case. If the notices were to be dispensed with, it was incumbent on the part of the arresting authority to mention the reason for arriving at the satisfaction that there exists any of the conditions as mentioned in Clause (a) to Clause (e) of Section 35 (1) (b) (ii) of the BNSS, 2023 in this case. 39. Though, in this case, in the memo of authorization for arrest of the petitioner issued by the Additional Director General of DGGI, it has been stated that the petitioner may influence witnesses and tamper with the evidence. However, on what basis such a conclusion has been drawn by the Additional Director General, DGGI has not been stated in writing as is the mandate of Section 35 (1) (b) (ii) of the BNSS, 2023. 40. In the case of “Arnesh Kumar Vs. State of Bihar” (supra), the Apex Court has while laying down guidelines which are required to be followed before a person may be arrested in case involving offence which entails punishment of imprisonment of less than 7(seven) years or up to 7(seven) years has observed that the directions issued would not only be applicable to the cases under Section 498A of IPC or Section 4 of the Dowry Prohibition Act, 1961 but would also cover such cases where offence is punishable with imprisonment for a term which may be less than 7 (seven) years or which may extend to 7(seven) years, whether with or without fine. Thus, the guidelines issued by the Apex Court in the case of Arnesh Kumar Vs. State of Bihar” (supra), are also applicable to this case. 41. The Section 69 of the CGST Act, 2017 provides for the power to arrest however, before exercising such power, the Commissioner must have reason to believe that a person has committed an offence specified clause (a) to clause Page No.# 13/15 (d) of sub-section (1) of Section 132 of CGST Act, 2017. 42. However, as stated in the Guidelines for Arrest and Bail in Relation to Offences Punishable under GST Act 2017 issued by the GST Investigation Wing on 17th August, 2022, the existence of the power to arrest and justification for exercise of it are quite distinct. 43. Section 69 of CGST Act, 2017 provides for the power to arrest. However, before exercising such power in a case involving offence punishable with imprisonment of less than 7(seven) years or which may extend up to 7(seven) years, justification for arrest has to be provided in terms of Section 35(1)(b)(ii) of the BNSS,2023. No such justification has been made by the arresting authority, in writing, while arresting the present petitioner in this case. Mere mechanical reproduction of the condition contained in Section 35(1)(b)(ii) of BNSS, 2023, viz., that the petitioner may tamper the evidence and influence the witnesses, without there being any material on record on which the arresting authority had arrived at the satisfaction regarding existence of such a condition and without stating such reasons in writing would be the violation of the statutory provisions contained in Section 35(1)(b)(ii) of BNSS, 2023. 44. It also appears that the petitioner has complied with the summons issued to him and has cooperated in the investigation. The practice of mechanically reproducing the conditions provided in clause (a) to (e) of the Section 35(1)(b)(ii) of BNSS, 2023 for effecting arrest has been deprecated by the Apex Court. 45. This Court is, therefore, is of the considered opinion that in the instant case, there has been violation of the guidelines issued by the Apex Court in the case of “Arnesh Kumar Vs. State of Bihar” (supra) and on that count alone, the petitioner is entitled to be released on bail. Page No.# 14/15 46. As regards the objection raised by the learned Standing Counsel, DGGI that the petitioner has approached this Court directly without approaching first to the Court of the learned Sessions Judge, as observed by the Division Bench of this Court in the case of “Kwmta Gwra Brahma Vs. State of Assam” (supra) and therefore, this bail application is not maintainable, this Court is unable to pursue itself to the said legal proposition in view of the settled legal proposition laid by the Apex Court in this regard. The Apex Court has observed in the case of “Sundeep Kumar Bafna Vs. State of Maharashtra” reported in “(2014) 16SCC 623” has clarified that the Sessions Court as well as the High Court exercises concurrent jurisdiction so far as Section 439 of Cr.P.C., 1973 (corresponding to Section 483 of BNSS, 2023) is concerned. If an application under Section 483 of BNSS, 2023 is filed before any of such Courts, it would have to venture the merits of the matter so as to decide whether the applicant has shown sufficient reasons or grounds for being enlarged on bail. 47. For the reasons discussed in the foregoing paragraphs, the above- named petitioner is allowed to go on bail of Rs. 1,00,000/- (Rupees one lakh only) with a suitable surety of like amount, subject to the satisfaction the learned Chief Judicial Magistrate, Kamrup (Metro) with following conditions:- i. That the petitioner shall cooperate in the investigation of DGGI/INV/Case No. 118/2025 (Part-3) relating to File No. DGGI/INV/118/2025-Gr C- O/o ADG-DGGI-ZU-GUWAHATI- Part(3). ii. That the petitioner shall appear before the Investigating Officer as and when so required by the Investigating Officer; iii. That the petitioner shall not directly or indirectly make any inducement, threat, or promise to any person who may be acquainted with the facts of the case, so as to dissuade such person from disclosing Page No.# 15/15 such facts before the Investigating Officer or to any Court; iv. That the petitioner shall provide his contact details including photocopies of his Aadhaar Card or Driving License or PAN card, mobile number, and other contact details before the Investigating Officer; v. That the petitioner shall not leave the jurisdiction of the Investigating Officer without prior permission of the Investigating Officer and when such leave is granted by the Investigating Officer, the petitioner shall submit his leave address and contact details during such leave before the Investigating Officer; and vi. That the petitioner shall not commit any offence while on bail. 48. This bail application is accordingly disposed of. 49. Send back the Case Diary. JUDGE Comparing Assistant