At least 24 troops have been killed on Monday by Maoist rebels.
It has warned that action will be taken against any officers found responsible for "lapses" leading up the attack.
West Bengal Home Secretary Ardhendu Sen said that intelligence reports suggested that Maoist rebels were in the area prior to the attack.
It was the biggest strike ever carried out by the rebels in West Bengal.
Nearly 50 Maoists on motorcycles encircled the camp of the Eastern Frontier Rifles (ERF) at Silda village and started firing on it.
More fighters joined the assault on foot, firing from automatic weapons.
More than 6,000 people have died during the rebels' 20-year fight for communist rule in many Indian states.
The Indian government recently began a major offensive against the rebels in several states.
Indian Prime Minister Manmohan Singh has described the Maoist insurgency as India's "greatest internal security challenge".
The rebels now have a presence in 223 of India's 600-odd districts.
'Maoist mole'
Intelligence officers told BBC that two specific alerts were issued which warned of such an attack on the Silda camp.
"We issued one alert on 23 November 2009 and another one just two days before the attack - on 13 February," said a highly placed intelligence officer.
 The government has launched a major offensive against the rebels |
The alerts said that mobile squads of the Peoples' Liberation Guerrilla Army (PLGA) - the armed wing of the Communist Party of India (Maoist) - may attack the camp.
"None of our alerts was taken seriously. Had officers acted upon our reports, this carnage could have been avoided and 25 lives would have been saved," the officer said.
The state police chief, along with other senior officers, visited the site of the attack on Tuesday and found what they said were "a number of lapses on the part of the security forces".
"The EFR men were not at all ready to strike back in case of an attack. Many of the men were not even carrying their arms," commented an officer.
Part of the inquiry's remit will be to assess whether any police officers "connived with" guerrillas before the attack.
Officers say that they are also investigating whether "Maoist moles" within the force are stealing ammunition from the state's armoury.
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