The Assam police, which faced a barrage of criticism on social media, had promised to look into the issue.
On Tuesday, Assam Director General of Police Mukesh Sahay said an initial inquiry indicated that it was a case of "mistaken identity" due to a similarity between the names of the JCO and the suspected foreigner.
The notice was meant for one Md Azmal Haque, son of Maqbool Ali, of village Kalahikas. But instead, it got sent to Mohd Azmal Haque, the son of Mokbul Hussain, who is a resident of the same village.
"It clearly shows that the case was registered against a different person and not the retired JCO. Unfortunately, due to the similarity of their names, the notice appears to have been wrongly served on the retired JCO," Mr Sahay said.
Mr Haque, who received the notice last week, said it had been a huge "insult". Police verification of army recruits is mandatory and he questioned how, even after going through all the due processes, he could be subjected to such an inquiry.
"I cried a lot... After 30 years of service I had to face such an insult..." Mr Haque told NDTV. Five years ago, his wife had received a similar notice, he said. On that instance too, the officials had declared her an Indian citizen after the couple presented all the documents.
Infiltration from Bangladesh is a sensitive issue in Assam. The state, which had six Muslim-majority districts in 2001, had nine within a decade. Last year, the BJP came to power in the state with a key promise of ending illegal immigration by sealing the 262-km-long porous border. But locals allege there have been several cases in which Indian nationals have been harassed.