NDPS Act: GSTIN in E-Way Bills Alone Cannot Establish Conscious Involvement

Ranjit Saha Vs State of Assam (Gauhati High Court)

Summary: The Gauhati High Court granted regular bail to an accused arrested in an NDPS case involving the seizure of 30,576 bottles of Codeine-based cough syrup concealed inside palm oil containers transported in a truck. The prosecution alleged that the petitioner was linked to the contraband because the GSTIN of his firm, “Maa Sushila Agency,” appeared on the e-way bills and the palm oil containers were marked for delivery to his business. The petitioner contended that he was a grocery trader whose GST number had been misused without his knowledge and that he had no connection with the truck, consignors, or co-accused. The Court noted that although the GSTIN of the petitioner’s firm appeared in the e-way bills, no witness or co-accused had implicated him, no documents showed any business dealings between his firm and the consignors, and no call records established any connection with the alleged traffickers. The Court further observed that the prosecution had not refuted the possibility that the GST number could have been used without the petitioner’s knowledge. Considering that the charge sheet had already been filed, the evidence against the petitioner was limited, and there were reasonable grounds to believe that he may not be guilty of the offence, the Court held that the conditions under Section 37 of the NDPS Act were satisfied and granted bail subject to conditions, including furnishing a bond of ₹1 lakh with two sureties and regular attendance before the trial court.

Facts of the Case:-

• A truck carrying 30,576 bottles of Codeine-based cough syrup concealed inside palm oil containers was intercepted by police.
• The contraband constituted a commercial quantity under the NDPS Act.
• During investigation, the GSTIN of Maa Sushila Agency, owned by Ranjit Saha, appeared in the e-way bills accompanying the consignment.
• The prosecution alleged that the petitioner consciously facilitated the transportation of narcotic substances by allowing the use of his GST registration.

Petitioner’s Defence:-

• He was merely a grocery trader dealing in palm oil and had no connection with the truck or contraband.
• His GSTIN was allegedly misused by unknown persons.
• He had voluntarily responded to notices under Section 67 NDPS Act and appeared before authorities, demonstrating absence of guilty intention.
• No purchases had been made from the consignors named in the e-way bills.

Findings of the Court:-

The High Court observed that:

1. No direct evidence connected the petitioner with the seized contraband.

2. No witness or co-accused implicated him.

3. No documents showed any business transactions between the petitioner and the consignors.

4. No call records or electronic evidence established contact between the petitioner and the accused persons.

5. The prosecution’s case was based solely on the appearance of the petitioner’s GSTIN in the e-way bills.

The Court held that mere reflection of a GSTIN number in transport documents, without corroborative evidence, was insufficient to establish conscious involvement in the offence.

Decision

The Court granted bail under Section 37 NDPS Act, holding that there were reasonable grounds to believe that the petitioner may not be guilty of the alleged offence and there was no material indicating that he would commit similar offences if released.

Section 37 in The Narcotic Drugs And Psychotropic Substances Act, 1985

37. Offences to be cognizable and non-bailable.—

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)—(a)every offence punishable under this Act shall be cognizable;

(b) no person accused of an offence punishable for offences under section 19 or section 24 or section 27A and also for offences involving commercial quantity shall be released on bail or on his own bond unless—

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release, and

(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.

(2) The limitations on granting of bail specified in clause (b) of sub-section (1) are in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force, on granting of bail.

The significance of Ranjit Saha v. State of Assam lies in the fact that the case involved a commercial quantity offence under the NDPS Act, thereby attracting the stringent conditions of Section 37. Despite the statutory bar on bail, the Gauhati High Court found that the prosecution had failed to produce any evidence linking the petitioner to the contraband except for the appearance of his GSTIN in the e-way bills. In the absence of any financial transactions, call records, witness statements, or other corroborative material establishing his involvement, the Court held that there were reasonable grounds to believe that the petitioner may not be guilty of the alleged offence and consequently granted bail under Section 37, reaffirming that mere reflection of a GSTIN in transport documents cannot, by itself, establish conscious involvement in an illegal transaction.

Relevance to GST and ITC Denial Matters

1. Mere Presence of GSTIN Cannot Establish Complicity

The Court accepted that a GST number may be used by third parties without the knowledge of the registered person.

Application in GST Cases:
Where the department alleges fake invoices, bogus transactions, or wrongful ITC merely because the taxpayer’s GSTIN appears in invoices, e-way bills, or supplier records, this judgment supports the proposition that:

Mere appearance of a GSTIN in documents is not conclusive proof of participation in tax evasion.

2. Burden of Proving Nexus Lies on the Department

The Court emphasized the absence of:

• Financial transactions,
• Call records,
• Statements implicating the petitioner,
• Documentary evidence linking him to the alleged crime.

Application in GST Appeals:

Where ITC is denied on the ground that a supplier is non-existent or suspicious, the department must produce independent evidence showing:

• Collusion,
• Knowledge,
• Participation, or
• Fraudulent intent.

Mere suspicion is insufficient.

3. Requirement of Corroborative Evidence

The Court found that e-way bills alone could not establish guilt.

Application in GST Proceedings:
If an assessment order relies solely on:

• GST portal data,
• GSTR mismatches,
• Supplier cancellation,
• E-way bill discrepancies,

without independent verification, the order may be challenged as being based on incomplete evidence and non-application of mind.

4. NDPS Principles with GST Proceedings

The significance of this judgment lies in the fact that the allegations were made under the NDPS Act, one of the strictest penal statutes in India, where the legislature has imposed stringent conditions for grant of bail. Even in such a serious criminal prosecution involving commercial quantity contraband, the Hon’ble Gauhati High Court held that mere appearance of the petitioner’s GSTIN in the e-way bills could not justify an inference of conscious involvement in the offence in the absence of corroborative evidence.

The Court specifically noted that:

• No witness implicated the petitioner.
• No co-accused named the petitioner.
• No transaction records existed between the petitioner and consignors.
• No call detail records established any connection.
• No incriminating documents were recovered from the petitioner.

Therefore, the Court found reasonable grounds to believe that the petitioner may not be guilty despite the stringent provisions of the NDPS Act.

Relevance in GST Matters

A similar principle applies in GST proceedings where Input Tax Credit is denied merely because:

• The supplier is subsequently found non-existent;
• The supplier’s registration is cancelled;
• The supplier fails to pay tax;
• The taxpayer’s GSTIN appears in invoices or e-way bills connected with suspicious transactions.

If, under a stringent penal law like the NDPS Act, the Court required independent and corroborative evidence before attributing criminal liability, then in GST proceedings—which are primarily fiscal and civil in nature—the Department must necessarily establish a clear nexus between the taxpayer and the alleged fraud through cogent evidence.

5. Principle Laid Down by the Court

The Gauhati High Court held that:

Mere reflection of a person’s GSTIN in transport documents or e-way bills cannot, by itself, establish conscious involvement in an illegal activity.

The Court emphasized that liability must be supported by:

• Independent evidence;
• Corroborative material;
• Proof of knowledge;
• Proof of participation;
• Evidence of commercial or financial nexus; and
• Evidence indicating conscious facilitation of the alleged offence.

Ratio / Principle Emerging from the Judgment

Mere use or mention of a taxpayer’s GSTIN in transport documents, e-way bills, invoices, or other records cannot, by itself, establish culpability. The investigating authority must produce independent and corroborative evidence demonstrating a conscious nexus between the person and the alleged illegal activity. In the absence of such evidence, no adverse inference can be drawn solely from the presence of the GSTIN in the relevant documents.

Conclusion

The judgment in Ranjit Saha v. State of Assam is an important precedent reaffirming that liability cannot be imposed merely on the basis of electronic records or documentary references. Even in prosecutions involving commercial quantity narcotic substances under the NDPS Act, the Court insisted upon corroborative evidence linking the accused to the alleged offence. The decision has substantial persuasive value in GST matters where demands or denial of ITC are sought to be justified solely on the basis of GST portal data, supplier defaults, or the appearance of a taxpayer’s GSTIN in disputed documents. The ruling reinforces the principle that conscious involvement must be proved through credible evidence and cannot be presumed merely from the existence of a GST registration number in transport records.

FULL TEXT OF THE JUDGMENT/ORDER OF GAUHATI HIGH COURT

Heard Mr. H.R. Choudhury, learned counsel for the petitioner. Also heard Ms. S.H. Borah, the learned Additional Public Prosecutor.

2. This is an application filed under Section 483 of the BNSS, 2023 for granting regular bail to the petitioner namely, Ranjit Saha, in connection with Special (N) Case No. 13/2026 arising out of Bazarichera PS Case No. 112/2025 proceeded under Section 22(C)/25/29 NDPS Act pending at the Court of Special Judge, Sribhumi.

3. Brief facts of the case are that on 25.08.2025, the complainant SI Prabhakar Choudhury of Bazaricherra Police Station lodged an FIR at Bazaricherra P.S. stating that on receipt of credible information at around 11:10 AM regarding one six-wheeler open body truck bearing Registration No. WB 25N 4370 transporting a large quantity of Codeine Phosphate based cough syrup from Kolkata towards Churaibari, necessary authorization for search and seizure was obtained as per Section 41(2) of the NDPS Act, 1985.

4. Accordingly, the complainant along with his team proceeded to Churibari Watch Post and at around 12:15 PM intercepted the said vehicle. During search in presence of independent witnesses, the police recovered 392 nos. of palm oil tin containers from the hidden compartment of the vehicle, which upon inspection were found to contain 30,576 bottles of Eskuf Cough Syrup (Codeine Phosphate & Chlorpheniramine Maleate Syrup). The truck was being driven by Saminur Islam, S/O- Lt. Bismilla Khan, and accompanied by Saikh Alamin, S/O Abukasim Saik – both residents of District North 24 Parganas, West Bengal.

5. In course of further investigation, two other persons, namely, Nur Ahmed As far as the role of the present petitioner is concerned, as per the charge sheet, during investigation, scrutiny of e-way bills and transport documents recovered from the vehicle revealed that the GST number mentioned therein was registered in the name of “Maa Sushila Agency” owned by petitioner/Ranjit Saha of Tripura and upon questioning, he admitted that the GST number reflected in the e-way bills of accused, Saminur Islam and Saik Alamin belonged to him. It was also found that “Maa Sushila Agency” deals with agro products, including palm oil. Significantly, the seized contraband was concealed inside palm oil containers marked for delivery to “Maa Sushila Agency” and genuine e-way bills were deliberately used as camouflage to facilitate trafficking of narcotic drugs, thereby clearly establishing forward linkage and conscious facilitation by accused, Ranjit Saha.

6. The petitioner was arrested on 11/01/2026 and has been languishing in custody since then. Prior to that, the petitioner was issued notice under section 67 of the NDPS Act on two occasions, and he submitted a written reply, and subsequently, he also appeared in person, but was taken into custody.

7. Mr. H.R. Choudhury, learned counsel for the petitioner submitted that the petitioner has no connection to the truck that was seized, nor to the consignments of goods found in the said truck. It is submitted that the petitioner is in the business of groceries and naturally has a GSTIN number, which has been misused by the actual culprits for the purpose of transporting the contraband. The petitioner does not procure supplies from any place outside the state of Tripura, and had not placed any order with the sending agency, i.e., Meera Trade Exim, and Radha Agency.

8. It is further submitted on behalf of the petitioner that if the petitioner is involved, he would not have responded to the notice under Section 67 of the NDPS Act and appeared personally without securing pre-arrest bail and that if he had guilty mind, he would have fled.

9. On the other hand, the learned Additional Public Prosecutor submits that the petitioner is in the business of grocery and in course of such business, he also deals with palm oil and the contraband was also concealed inside the palm oil containers marked for delivery to the firm of the petitioner and the e-way bills also contained his GSTIN number which clearly points to the role of the present petitioner.

10. I have duly considered the rival submissions and have perused the scanned copy of the TCR, from which it appears that charges have already been framed against the petitioner under section 22(c)(29) of the NDPS Act against the present petitioner, along with three other co-accused persons by order dated 06/03/2026.

11. As per the forwarding reports, charge sheet and other documents, it appears that the e-way bills revealed the consignor of the contraband to be one Meera Trade Exim and Radha Agency, both situated in the state of West Bengal. Although it appears from the record that notices under section 67 of the NDPS Act were issued to the aforesaid two entities, nothing progressed beyond that as far as the said consignors are concerned. None of the other witnesses or co-accused persons who have been arrested have implicated the present petitioner in any manner. All that is available in the form of material against the present petitioner is the e-way bills, where the GSTIN number of the petitioner’s firm is reflected, which, as contended, could have been used without the petitioner’s knowledge, a contention which has not been refuted by the prosecution. There is also no document seized by the police which would show that the petitioner firm had any dealings with the aforesaid consignor, and neither is there any Call Detail Record showing any connection of the petitioner with other co-accused persons or the consignors.

12. Since charge sheet has already been filed, it is for the prosecution to prove the case against the petitioner/accused, but at the stage of consideration of bail, the Court must have due regard to the material available on record so as to come to a conclusion as to whether the petitioner is entitled to bail and also in view of Section 37 of the NDPS Act, it is necessary for the Court to form a view as to whether, based on the said materials, there is reasonable grounds to believe that the petitioner may not be guilty of the offences mentioned therein, which of course is not the same as declaring the petitioner to be innocent but only that a plausible case of innocence exists.

13. Based on the available material, I am of the view that there is reasonable ground to believe that the petitioner may not be guilty of the offense with which he has been charged and furthermore, there is no material to show that if granted bail, the petitioner is likely to involve himself in offenses of a similar nature.

14. Having regard to the above, the prayer for bail is granted and the petitioner shall be released on bail on a sum of Rs. 100,000/- with two sureties of a like amount to the satisfaction of the learned Trial Court. It is further provided that the petitioner shall regularly attend the trial and shall not try to influence or intimidate any of the witnesses or tamper with the evidence.

15. The petition stands disposed of accordingly.