India, Aug. 29 -- A Mumbai special court on Friday granted bail to a CGST additional commissioner, a superintendent and a private person arrested in connection with an alleged Rs.40-lakh bribery case, holding that their arrests were "illegal" because the procedure prescribed by law had not been followed. The CBI, which arrested the three a day earlier, said it would challenge the bail order in a higher court.

The accused are Vinay Kantheti, additional commissioner (GST), CGST Raigad; Rakesh Sinha, superintendent (GST), CGST Raigad; and private person Narinder Rajput. Kantheti is a 2009-batch Indian Revenue Service (IRS) officer.

The case came to light after a complaint alleging that Sinha had demanded Rs.1.50 crore from a representative...