Defective Arrest, Non-Compliance with Mandatory BNSS Procedure in Rs. 8 Crore GST Fake ITC Case: HC Grants Bail

The Gauhati High Court has granted bail to an accused in a major Goods and Services Tax (GST) evasion case involving alleged fake Input Tax Credit (ITC) transactions exceeding Rs. 8 crore, holding that the arrest suffered from serious procedural defects under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. The bench of Justice Pranjal Das has observed that the notice for appearance indicated a time, which is after the petitioner has already been arrested and hence, such a faulty/mechanical compliance with the statutory notice cannot be considered as compliance at all. The case arose from an investigation conducted by the Anti-Evasion Unit of the Central GST (CGST), Guwahati, which alleged large-scale GST fraud carried out between June and October 2025. According to the prosecution, the accused, along with others, was involved in procuring GST registrations of non-existent firms and issuing fake invoices to pass on ineligible ITC without any actual supply of goods or services. The alleged fraudulent transactions were estimated to exceed ₹8 crore during the said period. Following the investigation, the accused was arrested on 14 November 2025 after obtaining approval from the competent authority under Section 69 of the CGST Act. The offences were booked under Section 132(5) of the CGST Act, which classifies certain GST offences as cognizable and non-bailable. An earlier bail application had already been rejected on 5 December 2025. Grounds Raised in the Subsequent Bail Application In the subsequent bail plea, the defence did not substantially argue the merits of the GST fraud allegations. Instead, it focused on non-compliance with mandatory procedural safeguards under Section 35(3) of the BNSS (corresponding to Sections 41 and 41A of the CrPC), which govern arrest procedures and the issuance of notice of appearance. The defence pointed out that while summons were issued under Section 70 of the CGST Act—governed by the Code of Civil Procedure—the authorities also purportedly invoked Section 35(3) BNSS in the same notice, which, according to the petitioner, was legally impermissible. More significantly, a notice dated 14 November 2025 required the accused to appear at 4:15 PM, whereas the arrest memo showed that he had already been arrested earlier that day at around 12:10 PM. The notice also contained contradictory dates, further casting doubt on its validity. After examining the case diary and the arrest records, the High Court noted that the investigating officer had admitted that the incorrect date mentioned in the notice was a typographical error. However, no explanation was offered for the more serious inconsistency—namely, that the time fixed for appearance in the notice was later than the actual time of arrest. Relying on the Supreme Court’s rulings in Radhika Agarwal v. Union of India and Arnesh Kumar v. State of Bihar, the Court reiterated that even arrests made by revenue authorities under the GST law must strictly comply with criminal procedural safeguards. The issuance of a valid notice of appearance and recording reasons for arrest are not mere formalities but mandatory requirements. Any mechanical or illusory compliance, the Court held, renders the arrest legally infirm. The High Court concluded that there was no effective compliance with Section 35(3) BNSS, as the accused had already been arrested before the time mentioned in the notice of appearance. This procedural lapse vitiated the arrest, entitling the accused to bail despite the serious nature of the allegations. The Court granted bail on a bond of ₹1 lakh with one surety of the like amount, subject to conditions including cooperation with the investigation, non-tampering of evidence, and non-influencing of witnesses. The Court also cautioned that any violation of these conditions would result in cancellation of bail. The High Court made broader observations on the need for revenue officials to be adequately trained in criminal procedural law. While acknowledging that GST officers are not police personnel, the Court emphasised that when they exercise powers of arrest, they must strictly adhere to procedural requirements under the BNSS. Failure to do so, the Court warned, could defeat genuine investigations on technical grounds, undermining the larger public interest Case Details Case Title: Sameer Malik Versus UOI Case No.: Bail Appln./3951/2025 Date: 19.12.2025 Counsel For Petitioner: S K NARGIS Click Here To Read Order Read More: HC Reaffirms Strict Compliance With Value Addition Norms for Duty-Free Imports Under EXIM Policy

Defective Arrest, Non-Compliance with Mandatory BNSS Procedure in Rs. 8 Crore GST Fake ITC Case: HC Grants Bail

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Defective Arrest, Non-Compliance with Mandatory BNSS Procedure in Rs. 8 Crore GST Fake ITC Case: HC Grants Bail

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