Page No.# 1/11 GAHC010196272025 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : Bail Appln./2836/2025 DEEPAK GARG SON OF LATE SURESH GARG, R/O FLAT NUMBER 004, KAILASH APARTMENT, RANI BAGAN, BELTOLA, KAMRUP METRO), ASSAM, PIN-781028, P.S. BASISTHA. VERSUS THE UNION OF INDIA AND 2 ORS. REPRESENTED BY THE DIRECTORATE GENERAL OF GOODS AND SERVICES TAX, GUWAHATI ZONAL UNIT, HN-77 RUPKONWAR JYOTIPRASAD AGARWALLA ROAD, PANJABARI, GUWAHATI-781027 2:THE ADDITIONAL DIRECTOR GENERAL OF GOODS AND SERVICE TAX INTELLIGENCE GUWAHATI ZONAL UNIT H.N. 77 RUPKONWAR JYOTI PRASAD AGARWALA ROAD PANJABARI GUWAHATI- 781027. 3:THE SENIOR INTELLIGENCE OFFICER DIRECTORATE GENERAL OF GOODS AND SERVICE TAX INTELLIGENCE GUWAHATI ZONAL UNIT H.N. 77 RUPKONWAR JYOTIPRASAD AGARWALA ROAD PANJABARI GUWAHATI-781027 Advocate for the Petitioner : MS. M L GOPE, MS S SARKAR,MS. M L GOPE,MR. D SAIKIA,MS. N HAWELIA Advocate for the Respondent : SC, DRI, Page No.# 2/11 BEFORE HONOURABLE MR. JUSTICE MRIDUL KUMAR KALITA ORDER Date : 08.09.2025 1. Heard Ms. N. Hawelia, 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, Deepak Garg, who has been detained behind the bars since 20.08.2025 in connection with the Case No. DGGI/INV/Case No. 118/2025 (Part- 1) relating to File No. DGGI/INV/118/2025-Gr C- O/o ADG-DGGI-ZU-GUWAHATI- Part(1). 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, authorized a search of the premises of the petitioner. 4. During search operation, conducted on 19.08.2025, in the premises of the petitioner, some mobile phones and documents were seized, the details of which are contained in GST INS-02 no DIN No. was provided in the INS 02 relating to search and seizure which is mandatorily required under the provisions of law. 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 member of a syndicate which provides fake invoices to coal suppliers to enable them to supply of coal from Assam to Bihar without payment of GST & Coal Cess. It is also alleged that the Page No.# 3/11 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. 6.93 Crore during the period from December 2022 to July 2025. 7. The learned 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. She submits that search of the premises of the petitioner and seizure of his laptop and mobile was made only on the basis of suspicion. 8. The learned 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. 9. The learned counsel for the petitioner has submitted that in the authorization 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)(b) of the CGST Act, 2017 which is punishable under Sections 132(1)(i) of the said Act. She 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 her submissions, she has cited a ruling of the Apex Court in the case of “Arnesh Kumar Vs. State of Bihar” Page No.# 4/11 reported in “(2014) 8 SCC 273”. She 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, she submits that the arrest of the petitioner in this case is illegal and the petitioner is entitled to get bail on that count only. 10. The learned 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. She 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 co-operate in the investigation, however, in the instant case, the petitioner has complied with the summons issued to him and has fully co-operated 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. 11. The learned counsel for the petitioner submits that the summons were issued to him to tender statements and to submit oral/documentary evidence and the petitioner has done so after appearing before the Senior Intelligence Officer, DGGI in pursuant to the summons. The learned 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) Page No.# 5/11 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. 12. She 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, therefore, the petitioner is entitled to get bail in this case. 13. In support of her submissions, the learned counsel for the petitioner has cited following rulings:- i. Anuj Mahesh Gupta Vs. Asstt. Commissioner of State Tax reported in 2021 SCC OnLine Bom 14100; ii. Manish Kumar Vs. Directorate General, Goods & Service Tax Intelligence reported in 2025 SCC Online P&H 5530; iii. Rahul Vs. Director General of Goods and Service Tax Intelligence, Nagpur Zonal Unit, thr. Sr. Intelligence Officer reported in 2024 SCC Online Bom 262; iv. Radhika Agarwal Vs. Union of India (UOI) and Ors. reported in 2025 INSC 272. 14. 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 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. 15. 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. Page No.# 6/11 16. 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)(b) of CGST Act, 2017. 17. 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. 18. 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). 19. 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 Page No.# 7/11 threat to financial health of the country. 20. 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 “Serious Fraud Investigation Office Vs. Aditya Sarda” reported in “2025 AIR (SC) 2431” 21. 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. 22. 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, some mobile handsets and some documents were seized. 23. 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, Page No.# 8/11 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. 24. 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. 25. 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 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. 26. 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. 27. In the case of “Arnesh Kumar Vs. State of Bihar” (supra), the Apex Court Page No.# 9/11 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. 28. 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 (d) of sub-section (1) of Section 132 of CGST Act, 2017. 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. 29. This Court is of the considered opinion that in spite of the provisions contained in Section 69 of CGST Act, 2017 regarding the power to arrest, 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. However, in the instant case, no such justification has been made by the arresting authority, in writing, while arresting the present petitioner. Mere mechanical reproduction of the conditions contained in Section 35(1)(b)(ii) of Page No.# 10/11 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, it would be the violation of the statutory provisions contained in Section 35(1)(b)(ii) of BNSS, 2023. 30. It also appears that the petitioner has complied with the summons issued to him and has co-operated 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. 31. 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. 32. 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 two sureties of like amount, subject to the satisfaction the learned Chief Judicial Magistrate, Kamrup(M) with following conditions:- i. That the petitioner shall co-operate in the investigation of DGGI/INV/Case No. 118/2025 (Part-1) relating to File No. DGGI/INV/118/2025-Gr C- O/o ADG-DGGI-ZU-GUWAHATI- Part(1); 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 Page No.# 11/11 the case, so as to dissuade such person from disclosing such facts before the Investigating Officer or to any Court; iv. That the petitioner shall provide his contact details including photocopies of his Aadhar 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 State of Assam 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. 33. This bail application is accordingly disposed of. 34. Send back the case diary. JUDGE Comparing Assistant