Provisions under Section 48 of BNSS, 2023, are applicable to arrests made under the CGST Act, 2017

Facts of the Case

• The respondents were accused of fraudulent availment of Input Tax Credit (ITC) of Rs. 8.27 crores and Rs. 8.26 crores during FY 2024-2025 in the names of M/s S. K. Enterprise and M/s Ankit Enterprise, respectively.
• A case was registered under Section 132(1)(c) of the CGST Act, 2017, and the respondents were arrested on 05.06.2025 in Kolkata, West Bengal.
• They were produced before the CJM, Barasat, Kolkata, who rejected their bail and granted transit remand for production before the CJM, Kamrup (M), Guwahati.
• On 07.06.2025, the respondents applied for bail before the CJM, Kamrup (M), Guwahati, who granted bail on the ground that the written Grounds of Arrest were not provided to the relatives of the accused at the time of arrest, allegedly violating Supreme Court mandates.
• The Union of India filed the present petition seeking to set aside the bail order dated 07.06.2025, contending compliance with all statutory provisions.

Contentions of the Parties

Petitioner (Union of India)

• All statutory requirements under the CGST Act, 2017 and BNSS, 2023 were complied with during arrest.
• Arrest Memos and Authorizations, including reasons to believe and Grounds of Arrest, were provided to the respondents; intimation of arrest was given to the nominated relative.
• Absence of specific statutory headings in documents is a curable irregularity, not an illegality, and caused no prejudice.
• Relatives were duly informed as per Section 48 of BNSS; no violation occurred.
• Seriousness of the offence and risk of evidence tampering warrant strict approach to bail.
• Respondents failed to cooperate with the investigation.
• Relied on Radhika Agarwal v. Union of India (2025 SCC OnLine SC 449), State of Karnataka v. Sri Darshan (2025 0 Supreme (SC) 1201), Ashok Dhankad v. State of NCT of Delhi (2025 0 Supreme (SC) 1196), Anna Reddy Sambasiva Reddy v. State of Andhra Pradesh (2009 0 Supreme (SC) 788), and The Mattancherry SC/ST Co-operative Society Ltd. v. A.P. Thomas (Kerala HC, 2022).

Respondents

• Bail was granted not only for non-mention of Sections 47 & 48 of BNSS but also for violation of statutory provisions.
• Non-mention of statutory sections in the Arrest Memo is a substantive defect, not a technical one, as per Supreme Court and CBIC Circulars.
• Failure to provide written Grounds of Arrest to relatives violates mandates of CGST Act and BNSS, as held in Vihaan Kumar v. State of Haryana (2025) 5 SCC 799.
• Detailed computation of alleged tax evasion was not provided, violating Section 132 of CGST Act.
• Grounds of Arrest were inadequate and not individualized; “reasons to believe” must be supported by material evidence.
• Arrest power should not be exercised before assessment except in exceptional cases.
• Distinction exists between “reasons for arrest” and “grounds for arrest”; the latter must be specific and in writing.
• Respondents complied with bail conditions and participated in investigation.
• Bail cannot be cancelled in a criminal revision petition; proper procedure is a separate application for cancellation.
• Alleged vindictive conduct by CGST Department; respondents were re-arrested on similar grounds and granted bail by Calcutta High Court.
• Relied on Daulat Ram v. State of Haryana (1995) 1 SCC 349, Jibangshu Paul v. NIA (2011 SCC OnLine Guahati 107), Natwar Kumar Jalan v. Union of India [WP(C) No. 6821/2024], Varun Goyal v. State of Assam (Crl.Pet. No. 699/2025).

Issues

• Whether the petition is for cancellation of bail or for setting aside the bail order, and the legal distinction between the two.
• Whether non-mention of the headings “Section 47 of BNSS” in the Ground of Arrest and “Section 48 of BNSS” in the Notice to the Relative, and non-provision of written Grounds of Arrest to the relative, vitiates the arrest and entitles the respondents to bail.
• Whether the arresting authority complied with the mandates of the CGST Act, 2017, BNSS, 2023, and relevant judicial pronouncements and guidelines.
• Whether minor procedural lapses, absent demonstrable prejudice, render the arrest illegal or entitle the accused to bail.

Decision

A. Nature of the Petition: Setting Aside vs. Cancellation of Bail

• The Court examined whether the present petition is for cancellation of bail or for setting aside the bail order. It found that the petition is for setting aside the impugned order dated 07.06.2025, not for cancellation of bail, as evident from the reliefs sought and the submissions made. The Court distinguished between the two concepts, citing Ranjit Singh v. State of Madhya Pradesh (2013) 16 SCC 797 and Puran v. Rambilas (2001) 6 SCC 338, holding that setting aside an unjustified, illegal, or perverse order is distinct from cancellation of bail based on supervening circumstances. The Court held it has jurisdiction to entertain the present petition under Sections 438, 528, and 442 of BNSS, 2023. (p33–37)

B. Examination of the Impugned Bail Order and Factual Matrix

• The Court noted that the CJM, Kamrup (M), Guwahati, granted bail primarily due to non-mention of statutory headings under Sections 47 & 48 of BNSS and for not providing written Grounds of Arrest to the relatives. The Court reproduced the relevant part of the bail order and examined the notices and arrest memos issued. It found that the notices to the relative (wife/mother) did not contain detailed Grounds of Arrest but did inform about the arrest and the offence. (p39–40)
• The respondents were provided with the Arrest Memo, Authorization of Arrest (including “reasons to believe”), and Grounds of Arrest at the time of arrest, which they acknowledged by signature. The Authorization to Arrest detailed the alleged offences, amounts involved, and relevant statutory provisions. (p41)
• The Court found that the Authorization to Arrest and Grounds of Arrest were in reasonable detail and in compliance with CBIC Circular No. 2/2022-23 (GST-Investigation) dated 17.08.2022, which prescribes guidelines for arrest and bail under the CGST Act, 2017. (p42–44)
• The Court observed that the arresting authority had prima facie material against the respondents, including their own statements admitting to the alleged availment of ineligible ITC. (p45–46)

C. Statutory and Judicial Guidelines on Arrest and Communication of Grounds

• The Court analyzed the Supreme Court’s decision in Radhika Agarwal v. Union of India (2025 SCC OnLine SC 449), which requires the Commissioner to record “reasons to believe” based on material evidence and to ensure that the pre-conditions of Section 132(5) of the CGST Act are satisfied before authorizing arrest. The Court noted that while assessment proceedings normally quantify tax evasion, arrest may be authorized without formal assessment if there is sufficient certainty and material. (p47)
• The Court agreed with the Supreme Court’s view that minor procedural lapses should not be magnified to grant undue advantage to accused in serious economic offences under special statutes. (p48–49)

D. Compliance with Section 48 of BNSS and Prejudice-Oriented Test

• The Court considered Vihaan Kumar v. State of Haryana (2025) 5 SCC 799, which mandates that Grounds of Arrest must be communicated to the arrested person and to relatives or nominated persons, to enable effective legal recourse. (p50)
• The petitioner relied on State of Karnataka v. Sri Darshan (2025 0 Supreme (SC) 1201), where the Supreme Court held that substantial compliance with the requirement to inform the arrested person and relatives is sufficient unless demonstrable prejudice is shown. The Court found that the respondents and their relatives were aware of the reasons for arrest, were legally represented, and applied for bail immediately, indicating no prejudice. (p51–52)
• The Court reconciled the decisions in Vihaan Kumar and Sri Darshan, holding that while communication of grounds to relatives is mandatory, the absence of written grounds does not render arrest illegal unless prejudice is demonstrated. (p53–56)
• On the facts, the Court found that the respondents and their family were promptly informed of the arrest and its grounds, and the respondents were able to seek legal remedies without delay. (p57–58)
• The Court held that Section 48 of BNSS was complied with, as the required information was given to the nominated relative. (p59)

E. Substantial Compliance and Effect of Procedural Lapses

• The Court concluded that the arresting authority complied with all mandates of the CGST Act, 2017, BNSS, 2023, and relevant guidelines. Minor procedural lapses, such as non-mention of statutory headings or absence of written grounds to relatives, did not cause prejudice and do not vitiate the arrest. (p60–61)
• The Court found the CJM’s interpretation of Sections 47 & 48 of BNSS to be erroneous and the bail order unsustainable. (p61)
• The Court did not address the parties’ contentions regarding post-bail conduct, as the petition was for setting aside the bail order, not for cancellation. (p62)

F. Final Orders

• The impugned order dated 07.06.2025 was set aside and quashed; the respondents’ bail bonds were cancelled. (p63)
• The Court clarified that the respondents are at liberty to seek bail afresh before the appropriate forum. (p64)
• The petition was allowed and disposed of accordingly. (p65)

Conclusion

The Court held that the arresting authority substantially complied with the mandates of the CGST Act, 2017, BNSS, 2023, and relevant judicial and administrative guidelines. Minor procedural lapses, such as non-mention of statutory headings or absence of written grounds to relatives, did not cause demonstrable prejudice and do not render the arrest illegal. The impugned bail order was found unsustainable and was set aside, with liberty to the respondents to seek bail afresh.

Disposition

Petition allowed. The impugned order dated 07.06.2025 granting bail is set aside and quashed; the respondents’ bail bonds are cancelled. Liberty is reserved to the respondents to apply for bail before the appropriate forum.

Source: Union of India v. Shashi Kumar Choudhary and Anr., (2025) taxcode.in 714 HC