Assam Director General of Police Mukesh Sahay said Paul was arrested by Dibrugarh police on "corruption-related allegations".
The APSC chairman would be produced before a court tomorrow, he said.
"There is an ongoing case against him and Dibrugarh police has arrested him in that connection," Sahay told PTI.
Dibrugarh Superintendent of Police Gautam Borah said Paul was arrested under various sections of the IPC "on the basis of complaints by Nabakanta Patir" and declined to give further details.
Borah said police would seek 14 days' custody from the court tomorrow.
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The APSC has been embroiled in controversies for quite some time over alleged corruption in the selection and appointment process in various services including Assam Police Service and Assam Civil Service.
Organisations like Krishak Mukti Sangram Samiti and All Assam Students' Union have attacked Paul for his alleged involvement in irregularities and had charged former chief minister Tarun Gogoi of protecting him.
Gogoi in July last year had announced setting up of an inquiry commission headed by a retired judge to probe alleged irregularities in state civil services examinations and recruitment.
According to Dibrugarh district Additional
Superintendent of Police Surjit Singh Paneshar, who is also the Investigating Officer, on October 27, Dibrugarh Town Planning Engineer Naba Kanta Patir was arrested based on a complaint filed by a dental surgeon whom he had promised a job through the APSC for a bribe of Rs ten lakh.
Based on Patir's statement during interrogation, personal security officer of APSC member Samedur Rehman, Mabud Ali Choudhury, was arrested the next day, Paneshar said.
Interrogation of Patir and Rehman and phone conversations about money transaction between Patir and the APSC chairman revealed strong evidences about a big racket involving Rakesh Paul, the police officer said.