Ashrafbhai Ibrahimbhai Kalavdiya vs Union Of India And Anr on 18 July, 2025

Judgment Summary: Ashrafbhai Ibrahimbhai Kalavdiya vs Union Of India And Anr

Court: The High Court of Judicature at Bombay
Case No: Criminal Bail Application No. 420 of 2025
Date of Judgment: 18th July 2025
Coram: The Hon'ble Mr. Justice Ashwin D. Bhobe

1. Outcome

The Criminal Bail Application was allowed. The applicant, Ashrafbhai Ibrahimbhai Kalavdiya, was directed to be released on bail on executing a P.R. Bond of ₹1,00,000/- with two local sureties, subject to certain conditions.

2. Core Issue

The central legal issue before the Court was whether the applicant's arrest and subsequent detention were illegal due to the failure of the Directorate General of GST Intelligence (DGGI) to communicate the 'grounds of arrest' in writing, thereby violating the fundamental right guaranteed under Article 22(1) of the Constitution of India and the statutory mandate of Section 50 of the Cr.P.C.

3. Key Facts

• Allegation: The applicant is alleged to be the operator of M/s. Pathan Enterprise and other fake GST firms. He is accused of fraudulently availing and utilizing Input Tax Credit (ITC) of approximately ₹11.14 Crore and fraudulently passing on ITC of ₹9.61 Crore without any actual supply of goods or services.
• Arrest: The applicant was arrested on 12th March 2024 by the Senior Intelligence Officer, DGGI, Pune, for offences under the CGST Act, 2017.
• Custody: The applicant has been in judicial custody for over 1 year and 4 months.
• Procedural History: The applicant's initial bail application was rejected by the Additional Sessions Judge, Pune. He then approached the High Court.
• Disputed Documents: The case centered on two documents provided at the time of arrest: the 'Arrest Memo' and the 'Authorization to Arrest'. The DGGI claimed these documents fulfilled the legal requirement of informing the grounds of arrest.

4. Arguments

a) Applicant's Arguments (Represented by Sr. Adv. Sudeep Pasbola):

• Constitutional Violation: The arrest was illegal due to non-compliance with the mandatory requirement of communicating the grounds of arrest as per Article 22(1) of the Constitution and Section 50 of the Cr.P.C.
• Insufficiency of Documents: The 'Arrest Memo' merely stated the sections under which the applicant was arrested and did not detail the factual grounds. The 'Authorization to Arrest' was an internal departmental document not addressed to the applicant and therefore could not be considered as communication of grounds to him.
• Prolonged Incarceration: The applicant has been in jail for a significant period (1 year, 4 months) for an offence where the maximum punishment is 5 years.
• Trial Status: The trial has not progressed despite multiple hearings.

b) Respondent's Arguments (DGGI, represented by Spl. P.P. Jitendra Mishra & Saket Ketkar):

• Compliance Shown: The grounds of arrest were sufficiently communicated through the Arrest Memo and the Authorization to Arrest, which the applicant acknowledged by making endorsements in Gujarati.
• Estoppel: The applicant did not raise the grievance of non-communication of grounds at the time of remand or before the lower court, and is therefore estopped from raising it before the High Court.
• Sufficient Knowledge: The applicant was aware of the basic facts of the case, i.e., his arrest in a GST evasion matter.
• Distinguishing Precedent: The case of Vineet Jain was not applicable as the applicant in this case has another similar case pending in Surat, Gujarat, indicating antecedents.

5. Court’s Reasoning

• Burden of Proof: The Court held that when an accused alleges non-compliance with Article 22(1), the burden shifts to the arresting agency (DGGI) to prove that the constitutional and statutory requirements were met.
• Analysis of Arrest Memo: The Court found the Arrest Memo inadequate. It merely mentioned the legal provisions (Section 132 of the CGST Act) but failed to provide the "basic facts constituting the grounds." This does not meet the standard required by law.
• Analysis of Authorization to Arrest: The Court rejected this document as a valid communication of grounds for three key reasons:
  1. It is an internal communication within the DGGI.
  2. It is not addressed to the applicant.
  3. It was issued under Section 69(1) of the CGST Act (power to authorize an arrest), whereas the duty to inform grounds of arrest falls under Section 69(2). The DGGI conceded that no separate written grounds were provided under Section 69(2).
• Illegality of Arrest: The Court concluded that the DGGI failed to discharge its burden. The non-communication of grounds of arrest in writing is a clear violation of Article 22(1). This constitutional breach rendered the arrest and the subsequent custody illegal.
• Duty to Grant Bail: Citing Supreme Court precedents (Prabir Purkayastha, Directorate of Enforcement v/s. Subhash Shrama), the Court affirmed that once a violation of fundamental rights under Articles 21 and 22 is established, it is the duty of the Court to grant bail, as the very foundation of the detention is vitiated.
• Antecedents Not a Bar: The Court dismissed the argument regarding the applicant's other pending case, holding that the pendency of other cases cannot be the sole basis for refusing bail, especially when the arrest itself is found to be illegal.

6. Statutory References

• Constitution of India: Article 21, Article 22(1), Article 22(5).
• Central Goods and Services Tax (CGST) Act, 2017:
  • Section 69 (Power to arrest)
  • Section 132(1)(b), 132(1)(c), 132(1)(i) (Offences)
  • Section 132(2), 132(5) (Punishment, Cognizable & Non-bailable nature)
• Code of Criminal Procedure, 1973 (Cr.P.C.): Section 50.
• Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS): Section 483 (Bail Application provision).

7. Precedents Cited

• Vineet Jain v. Union of India
• Vihaan Kumar v. State of Haryana and Another
• Prabir Purkayastha v. State (NCT of Delhi)
• Pankaj Bansal v. Union of India
• Ashish Kakkar v. UT of Chandigarh
• Directorate of Enforcement v. Subhash Shrama
• Prabhakar Tewari v. The State of U.P. and Another