Santosh Kumar Sah Vs Union of India (Calcutta High Court)
The Calcutta High Court heard a bail application filed under Section 439 CrPC/483 BNSS by Santosh Kumar Sah, who is in judicial custody in connection with an alleged ₹37.29 crore wrongful Input Tax Credit (ITC) claim under the CGST Act, 2017. Sah, an authorized signatory of M/S Buddhu Sha and Co., a registered GST assessee and distributor of ITC Ltd’s tobacco products in Jaigaon, was arrested on 31 March 2025 without a warrant based on an authorisation issued by the CGST Commissioner, Siliguri. The arrest, made before any formal complaint was filed, was reportedly based on discrepancies in E-way bill toll crossing data which allegedly suggested fictitious transactions. Sah’s counsel argued that no adjudication under Section 74 or quantified demand preceded the arrest, and the goods in question were found in stock with proper documentation and CCTV evidence confirming their delivery.
The petitioner contended that the arrest was arbitrary, especially since earlier searches on 29–30 March 2025 revealed no unaccounted goods or incriminating material. A spot panchanama documented the physical verification of goods, matching batch numbers, and supportive documents such as invoices and payment records. Moreover, Sah had provided full cooperation, including access to digital accounts and records. It was further alleged that officers returned the next day attempting to replace the original panchanama with an altered version, a move which was declined by the petitioner. His legal counsel also emphasized that the allegations concern financial years preceding FY 2024-25, and that earlier proceedings under Section 73 (applicable to non-fraudulent matters) had ended with no adverse findings. Additionally, the petitioner had previously complied with departmental requests for documentation without any accusations of non-cooperation.
