HC Upholds CGST Arrest for Compliance With Procedure

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

Chanda Deepak Kochhar v. CBI 2023 SCC OnLine Bom 72 (para 8)
Satender Kumar Antil v. CBI 2026 SCC OnLine SC 162 (para 8)
Arvind Kejriwal v. Directorate of Enforcement [2024] 164 taxmann.com 318 (SC) (para 8)
Prabir Purkayastha v. State (NCT of Delhi) [2024] 162 taxmann.com 539/185 SCL 1 (SC) (para 8)
Radhika Agarwal v. Union of India [2025] 171 taxmann.com 832/95 GSTL 225 (SC) (para 8)
Mahesh Sharma v. Union of India [2025] 175 taxmann.com 735 (Rajasthan) (para 8)
Rajesh Agarwal v. State of Rajasthan [2025] 175 taxmann.com 610/110 GST 731/100 GSTL 31 (Rajasthan) (para 8)
Vikas Sain v. State of Rajasthan [2025] 176 taxmann.com 602 (Rajasthan) (para 8)
Zeba Khan v. State of UP & Ors. 2026 INSC 144 (para 14)
Zeba Khan v. State of UP 2026 INSC 144 (para 14)
Pankaj Bansal v. Union of India [2023] 155 taxmann.com 39/[2024] 181 SCL 73 (SC) (para 17)
Vihaan Kumar v. State of Haryana [2025] 5 SCC 799 (para 17)
Mihir Rajesh Shah v. State Of Maharashtra 2025 INSC 1288 (para 17).