HC Upholds CGST Arrest for Compliance With Procedure

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Arrest Under CGST Act

Case Details: Umang Garg vs. Union of India - [2026] 186 taxmann.com 824 (Rajasthan)

Judiciary and Counsel Details

  • Praveer Bhatnagar, J.
  • Swadeep Singh Hora, Sudhir Jain, Advs. & Jitendra Singh Poonia, SPP for the Petitioner.
  • Kinshuk Jain, Senior Standing Counsel, Rajiv Kumar Singh & Shivam Kumar Sharma, Intelligence Officers for the Respondent.

Facts of the Case

The petitioners were arrested by DGGI in connection with alleged wrongful availment and passing of input tax credit through fake firms and goods-less invoices under the CGST Act. The petitioners challenged the legality of arrest contending that written grounds of arrest had either not been furnished or were inadequate in terms of Section 35 of the BNSS read with Section 69 of the CGST Act. It was further contended that the allegations were based entirely on documentary and electronic evidence already in possession of the Department and therefore custodial detention was unwarranted. The Department submitted that the petitioners were involved in operation of fake firms and fraudulent ITC transactions involving substantial amounts, supported by statements, electronic devices, WhatsApp chats, forensic analysis and documentary evidence gathered during investigation. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the law merely requires communication of grounds of arrest in writing shortly after arrest and does not mandate detailed reproduction of all evidentiary material forming part of economic offence investigations. It observed that the arrest records contained DIN-linked arrest memos and contemporaneous written grounds of arrest bearing acknowledgment signatures of the petitioners.

The Court further observed that the petitioners had failed to place cogent material establishing that the grounds of arrest were antedated or subsequently prepared and that prior searches, seizures and statements demonstrated their awareness of the allegations and material collected during investigation. It further held that prima facie evidence including electronic records, seized devices, WhatsApp chats and statements indicated involvement of the petitioners in operation of fake firms and issuance of goods-less invoices for fraudulent availment and passing of ITC. Accordingly, considering the gravity and magnitude of the alleged economic offences and the ongoing investigation, the Court declined to grant bail and dismissed the bail applications.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied