The Nobel medal and the citation, won by Tagore in 1913, were stolen from Visva Bharati University’s museum.
The CBI had taken over the case soon after, but failed to recover it and closed the case in 2007.
Pradip Bauri was picked up by the Special Investigation Team (SIT) from his Ruppur village residence in Birbhum district earlier this month, the official said on condition of anonymity.
Bauri would be taken to Gujarat for a narco analysis test and a court has given permission for the same, he added.
It was clear after questioning Bauri, who was detained for nearly two weeks by the CBI during its investigation into the case, that he had knowledge of the entire episode and of those involved in the theft, he said.
Bauri, who was the gram panchayat pradhan of Ruppur from 1998 to 2003, had given shelter to the culprits involved in stealing the medal and also helped them flee the state, the officer said.
Following his interrogation, it has come to light that a Bangladeshi national, Mohammed Hossain Shipul, was the mastermind of the plot and two Europeans were also involved in it, he added.
West Bengal Chief Minister Mamata Banerjee had said in August that if the state government was given the responsibility, it could try to retrieve the Nobel medallion stolen from a museum of Visva Bharati University.
The SIT which arrested Bauri was formed thereafter. It consists of Kolkata Police Commissioner Rajiv Kumar, ADG of Criminal Investigation Department (CID) Rajesh Kumar and IG of CID (II) Javed Shamim.