Ujjawal Kumar Agarwal vs. The State Of Assam And 2 Ors.

Held

The High Court, while refraining from considering the merits of the submissions made by the petitioner at this stage, noted that the petitioner has been in custody since October 8, 2025. The Court observed that the materials required by the respondent authorities were not set out in the manner prescribed. Consequently, the Court was of the considered view that further custodial interrogation of the petitioner may not be necessary at this juncture. Therefore, the petitioner was deemed entitled to be released on regular bail. The Court directed the petitioner's release on furnishing a bail bond of Rs. 25,000/- with two local sureties of the like amount, subject to conditions including appearance before the Investigating Officer when called, not inducing or threatening witnesses, and not leaving the jurisdiction without prior permission. Any violation of these conditions could lead to the cancellation of bail.

Facts

The petitioner, Ujjawal Kumar Agarwal, proprietor of M/S BKS Enterprises, filed an application for regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023. He was arrested on October 8, 2025, in connection with Case No. CT/ENF/ARST/2025/04, registered under Section 132(5) of the Assam Goods & Service Tax Act, 2017. The petitioner was taken into custody and is currently in judicial custody. The authorities sought his remand to judicial custody. The petitioner's bail application was previously rejected by the Trial Court. The dispute involves allegations of utilization of ineligible input tax credit.

Key Issues

1. Whether the arrest of the petitioner is maintainable under Section 132 of the Assam Goods & Service Tax Act, 2017, given the alleged non-compliance with its provisions? Petitioner's arguments: The petitioner contended that the authorities failed to satisfy the requirements of Section 132 of the Assam Goods & Service Tax Act, 2017, rendering his arrest unlawful. He argued that the utilization of ineligible input tax credit was in relation to transactions with 12 firms, with a taxable value of approximately Rs. 17,73,00,053/-. 18% of this amount, approximately Rs. 3,00,00,000/-, being less than Rs. 5,00,00,000/-, constitutes a non-cognizable and bailable offense, not warranting arrest. Furthermore, the authorization to arrest lacked material particulars and contained only vague allegations of utilizing ineligible input tax credit amounting to Rs. 12,00,00,000/-, without specifying the basis for this conclusion. The Trial Court allegedly rejected his bail application solely based on the nature of the allegations without appreciating the facts. Since the allegations are based on documentary evidence, custodial interrogation is not required. Revenue's arguments: The State argued that the investigation is in its nascent stage. Materials gathered during the interrogation of the petitioner and his colleagues indicate further mis-utilization of benefits under the Act, which is currently under inquiry. Releasing the petitioner on bail at this stage would prejudice the investigation.