Non-Providing Written Grounds of Arrest to Relative Not Fatal if No Prejudice Caused to Accused: Gauhati High Court - 2025-10-11

Gauhati HC Sets Aside Bail in ₹16 Crore GST Fraud Case, Cites 'Prejudice-Oriented Test' for Procedural Lapses

Guwahati: The Gauhati High Court has set aside a bail order granted to a father-son duo accused of fraudulently availing over ₹16 crores in Input Tax Credit (ITC), ruling that procedural lapses during arrest, such as not providing written grounds of arrest to a relative, do not automatically render the arrest illegal unless demonstrable prejudice is caused to the accused.

Justice Anjan Moni Kalita, while hearing a criminal revision petition filed by the Directorate General of Goods and Services Tax Intelligence (DGGI), quashed the order of the Chief Judicial Magistrate (CJM), Kamrup (M). The High Court clarified that while procedural safeguards are vital, they should not be viewed through a "magnifying glass" to grant undue advantage in serious economic offences.

Case Background

The case involves Shri Shashi Kumar Choudhary and his son, Shri Ankit Choudhary, proprietors of M/s S.K. Enterprise and M/s Ankit Enterprises, respectively. The DGGI alleges that they fraudulently availed ineligible ITC amounting to ₹8.27 crores and ₹8.26 crores. Following their arrest in Kolkata on June 5, 2025, they were brought to Guwahati.

On June 7, 2025, the CJM, Kamrup (M), granted them bail, primarily on two grounds: 1. The Arrest Memo and Notice to Relative did not bear the headings "Section 47 of BNSS" and "Section 48 of BNSS." 2. The written "Grounds of Arrest" were not provided to the accused persons' relative, which the CJM deemed a violation of Supreme Court mandates.

The DGGI challenged this order before the High Court, arguing it was a perverse order based on minor technicalities.

Arguments Before the High Court

Petitioner's Submissions (DGGI): * The DGGI, represented by Advocate S.C. Keyal, argued that the substance of Sections 47 (informing grounds of arrest) and 48 (informing a relative) of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, was fully complied with. * The accused were provided with Arrest Memos, Authorisation for Arrest, and detailed Grounds of Arrest. A nominated relative was also immediately informed. * The absence of a section heading on a document is a curable irregularity, not a fatal illegality that vitiates the entire arrest. * Citing the Supreme Court's decision in State of Karnataka vs. Sri Darshan , the petitioner contended that no prejudice was caused to the respondents, as they were legally represented and applied for bail immediately, demonstrating a clear understanding of the accusations.

Respondents' Submissions (The Accused): * Advocate B. Shraff, for the respondents, countered that strict compliance with statutory safeguards is mandatory, especially given the drastic power of arrest without a warrant under the CGST Act. * Relying on the Supreme Court's ruling in Vihaan Kumar vs. State of Haryana , they argued that communicating the grounds of arrest in writing to a relative is a constitutional mandate to make the right to liberty effective. * They asserted that this failure was not a mere technicality but a substantive violation that rightly led the CJM to grant bail.

High Court's Analysis and Decision

Justice Kalita first distinguished between a petition to set aside a bail order and one for cancellation of bail. The court held that it had the jurisdiction to annul a "perverse or illegal" bail order, which is distinct from cancelling bail due to supervening circumstances like witness tampering.

The court then meticulously examined the facts and legal precedents. It noted that the respondents had indeed received the Arrest Memos, which included annexures detailing the "reasons to believe" and "Grounds of Arrest," and had acknowledged their receipt. Their relative was also informed immediately.

The judgment emphasized a "prejudice-oriented test," drawing from the Supreme Court's reasoning in Sri Darshan . The High Court observed:

"The mere absence of written grounds does not ipso facto render the arrest illegal, unless it results in demonstrable prejudice or denial of a fair opportunity to defend... In the present case, the arrest memos and remand records clearly reflect that the respondents were aware of the reasons for their arrest. They were legally represented from the outset and applied for bail shortly after arrest, evidencing an immediate and informed understanding of the accusations. No material has been placed on record to establish that any prejudice was caused due to the alleged procedural lapse."

Reconciling the principles laid down in Vihaan Kumar (mandating communication to relatives) and Sri Darshan (applying a prejudice test), the court held that in the peculiar facts of this case, the prejudice-oriented approach was more appropriate. Since the accused and their family were well-aware of the grounds and had immediate access to legal counsel, no prejudice occurred.

The court concluded that the DGGI had substantially complied with the provisions of the CGST Act and the BNSS. Consequently, the arrest was not illegal, and the CJM had erred in granting bail on grounds of minor procedural non-compliance.

The High Court, therefore, allowed the DGGI's petition, setting aside and quashing the CJM's bail order dated June 7, 2025. The bail bonds of the respondents were cancelled, though they remain at liberty to apply for bail again in an appropriate forum on other grounds.