Facts of the Case

The petitioner, Vemula Yougander, apprehending arrest, filed a petition under Section 438 of the Code of Criminal Procedure, 1973 seeking anticipatory bail in connection with an investigation by the Director General of GST Intelligence (DGGI), Hyderabad Zonal Unit (File No. DGGI/INV/GST/3272/2023-Gr.F dated 06.10.2023). Summons had been issued to the petitioner under Section 70 of the Central Goods and Services Tax Act, 2017, requiring him to appear for recording of evidence and production of documents. The petitioner had been repeatedly called for examination over a period of time. Admittedly, no steps had been taken by the department under Section 69 of the CGST Act (the arrest power) despite the petitioner's continued appearances before the authority.

Issues Involved

  1. Whether a person merely summoned under Section 69 of the CGST Act, 2017 for recording of statement can invoke Section 438 CrPC to seek anticipatory bail.
  2. What remedy, if any, is available to such a person apprehending arrest.

Petitioner's Arguments

  • The petitioner was being repeatedly called for examination by the DGGI over a period of time and apprehended arrest, warranting protection through anticipatory bail under Section 438 CrPC.

Respondent's Arguments

  • Represented by senior counsel for the Union of India, resisting the grant of anticipatory bail on the footing that the relief is not maintainable at the summons stage under Section 69 of the CGST Act, consistent with the settled position of law.

Court Order/Findings

  • Relying on the Supreme Court's decision in State of Gujarat v. Choodamani Parmeshwaran Iyer and Another (2023 SCC OnLine SC 1043), the Court noted the Supreme Court's holding that where a person is summoned under Section 69 of the CGST Act, 2017 for recording of a statement, Section 438 CrPC cannot be invoked, since no FIR is registered and the power of arrest under Section 69(1) has not been exercised at that stage.
  • The Court held that the only recourse for a person summoned under Section 69 who apprehends pre-trial arrest is to invoke the writ jurisdiction of the High Court under Article 226 of the Constitution, and not to seek anticipatory bail under Section 438 CrPC.
  • Following this binding precedent, the criminal petition seeking anticipatory bail was disposed of.
  • The petitioner was granted liberty to invoke the writ jurisdiction of the Court, if so advised; any pending miscellaneous applications in the criminal petition were closed.

Important Clarification

  • A person merely summoned under Section 69 of the CGST Act, 2017 for recording of statement or production of documents cannot maintain an application for anticipatory bail under Section 438 CrPC, since no FIR is registered and no arrest power has been exercised at that stage.
  • The appropriate remedy for a person apprehending arrest in connection with a GST summons is to invoke the writ jurisdiction of the High Court under Article 226 of the Constitution seeking protection against coercive pre-arrest action, rather than approaching the criminal court for anticipatory bail.

Sections Involved

  • Section 69, Central Goods and Services Tax Act, 2017 – Power to arrest.
  • Section 70, Central Goods and Services Tax Act, 2017 – Power to summon persons to give evidence and produce documents.
  • Section 438, Code of Criminal Procedure, 1973 – Anticipatory bail, held inapplicable at the summons stage under Section 69 of the CGST Act.

Decision – In Favour of

The outcome favours the Department in the narrow procedural sense that the anticipatory bail route was held unavailable at the summons stage; however, the Court did not adjudicate any tax liability or criminal culpability, and expressly left the petitioner free to invoke writ jurisdiction for protection against coercive action, making this essentially a procedural disposal rather than a decision on merits.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: Criminal Petition No. 10430 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Sri Justice K. Surender
  • Decision Date: 14.11.2023
  • Disposal Nature: Disposed of - anticipatory bail application disposed of following SC ruling that Section 438 CrPC cannot be invoked at summons stage under Section 69 CGST Act; liberty to invoke writ jurisdiction

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