Gaurav Agarwal vs. The Union Of INDIA And Ors

Held

The Court held that there was no conflict of interest for the Advocate General to appear as Senior Counsel for the petitioner. The DGGI is a central government agency, and the State of Assam is not the prosecuting agency. The Advocate General had obtained consent from the State Government, and there was no objection from the State. Regarding the arrest, the Court found that the DGGI failed to provide written justification for the arrest as mandated by Section 35(1)(b)(ii) of the BNSS, 2023. The arrest was made without stating the reasons in writing, which constitutes a violation of statutory provisions and the guidelines laid down in Arnesh Kumar Vs. State of Bihar. The Court also held that the bail application was maintainable before the High Court, as it exercises concurrent jurisdiction with the Sessions Court for bail under Section 483 of the BNSS, 2023, as clarified by the Supreme Court in Sundeep Kumar Bafna Vs. State of Maharashtra. Consequently, the petitioner was granted bail.

Facts

The petitioner, Gaurav Agarwal, was detained on August 20, 2025, in connection with a Directorate General of Goods and Services Tax Intelligence (DGGI) investigation into alleged tax evasion on coke supply. Information suggested the petitioner was part of a syndicate providing fake invoices to coal suppliers to evade GST and Coal Cess on coal transported from Assam to Bihar. The DGGI searched the petitioner's residence on August 18, 2025, seizing a mobile handset and laptop. The petitioner was summoned under Section 70 of the CGST Act, 2017. Allegations include the use of fake invoices from non-existent firms and E-way bills for coal movement, leading to an alleged tax evasion of Rs. 28.95 Crore between March 2023 and May 2025.

Key Issues

1. Whether the Advocate General of Assam, appearing as Senior Counsel for the petitioner, creates a conflict of interest, given that 50% of the evaded tax would go to the State Government, and the DGGI cited M/S Armour Security (India) Ltd. Vs. Commissioner, CGST (2025 0 INSC 982)? 2. Whether the arrest of the petitioner was justified and complied with the guidelines laid down in Arnesh Kumar Vs. State of Bihar and Section 35(1)(b)(ii) of the BNSS, 2023, particularly regarding the written justification for arrest? 3. Whether the bail application is maintainable before the High Court directly, despite the petitioner not first approaching the Sessions Court, considering the ruling in Kwmta Gwra Brahma Vs. State of Assam, and the Apex Court's clarification in Sundeep Kumar Bafna Vs. State of Maharashtra regarding concurrent jurisdiction under Section 439 Cr.P.C. (Section 483 BNSS, 2023)? Petitioner's arguments: The Advocate General is appearing in his capacity as a Senior Advocate, not in his official role. The DGGI, an instrumentality of the Union Government, is the prosecuting agency, and the State of Assam has no role. Consent from the Assam Government was obtained. The arrest lacked written justification as required by law, and the guidelines in Arnesh Kumar were violated. The High Court has concurrent jurisdiction with the Sessions Court for bail applications.