Facts of the Case

The petitioner, Vemula Yougander, a computer operator and self-described accountant/GST consultant to about 122 companies, and a person stated to be 90% physically handicapped, filed a writ petition under Article 226 before the High Court for the State of Telangana at Hyderabad against the Union of India (through the Directorate General of GST Intelligence, DGGI) and the Senior Intelligence Officer, DGGI, Hyderabad Zonal Unit, along with three named trading concerns. He challenged six summons issued between 5.10.2023 and 13.12.2023 under Section 69 of the Central Goods and Services Tax Act, 2017, issued in the course of a DGGI investigation into fraudulent availment and passing of Input Tax Credit (ITC) through fake invoices, reportedly implicating around 151 taxpayers. The petitioner sought a mandamus restraining the Senior Intelligence Officer from detaining, threatening or arresting him without following Section 41-A of the Code of Criminal Procedure and the Supreme Court's directions in Arnesh Kumar v. State of Bihar. He had earlier sought anticipatory bail in Crl.P.No.10430 of 2023, which was rejected on 14.11.2023. Coram: Justice P. Sam Koshy and Justice N. Tukaramji; order dated 19 December 2023.

Issues Involved

  1. Whether Section 41-A CrPC safeguards and the Arnesh Kumar guidelines apply to a person summoned under Section 69 of the CGST Act, 2017.
  2. Whether a writ petition under Article 226 could be used to obtain, in substance, anticipatory-bail-like protection after such relief had already been declined by the criminal court.
  3. Whether the manner and frequency of the petitioner's repeated attendance before DGGI warranted judicial moderation given his physical disability.

Petitioner's Arguments

  • As a professional accountant acting only on client instructions, he had no personal role in any company's fraudulent availment of ITC and was being unfairly cast as the mastermind.
  • Being 90% physically handicapped and unable to move without assistance, being repeatedly summoned and made to wait at the DGGI office till late evening amounted to harassment disproportionate to his condition.
  • Section 41-A CrPC safeguards and the Arnesh Kumar directions ought to apply before he could be detained, threatened, or arrested in connection with the investigation.

Respondent's Arguments

  • Having failed to secure anticipatory bail in Crl.P.No.10430 of 2023, the petitioner was using the writ petition as a backdoor route to the same protection.
  • Statements of around 18 of the 151 implicated taxpayers already recorded showed they were unaware of the fraudulent ITC entries, while a co-accused, Shaik Ajmal, stated the petitioner was his business partner sharing profits equally from the racket.
  • Despite proper service of summons, the petitioner habitually sought adjournments and appeared late, obstructing timely investigation of a fraud spanning 151 taxpayers for whom he acted as consultant.

Court Order/Findings

  • Relying on the Supreme Court's ruling in State of Gujarat v. Choodamani Parameshwaran Iyer and the Kerala High Court's ruling in Subair T.B. v. State of Kerala, the Court held that a person summoned under Section 69 CGST Act cannot invoke Section 438 CrPC for anticipatory bail.
  • The Court held that a writ of mandamus restraining a statutory investigating authority from performing its functions is not maintainable except in truly exceptional cases, and found no strong case for interference with the summons.
  • Taking note of the petitioner's genuine physical disability, the Court moderated the manner of investigation: the DGGI was directed to call the petitioner for investigation only on Mondays and Fridays during office hours, with the petitioner directed to render full cooperation.
  • Liberty reserved to the investigating authority regarding arrest, subject to the parameters laid down in P.V. Ramana Reddy.

Important Clarification

  • A writ petition under Article 226 seeking to restrain arrest or further summons in a GST investigation cannot substitute for anticipatory bail once that relief has been declined by the criminal court.
  • Section 41-A CrPC safeguards are not mandatorily attracted to a person summoned under Section 69(1) CGST Act; only the 'reasons to believe' standard under Section 69(1) itself governs.
  • Courts retain equitable discretion to moderate the frequency and manner of an investigation, without curbing its substance, where a summoned person's genuine physical disability is demonstrated.

Sections Involved

  • Section 69, Central Goods and Services Tax Act, 2017 — power of arrest and issuance of summons in serious GST-fraud investigations.
  • Section 41-A, Code of Criminal Procedure, 1973 — notice of appearance before arrest, held inapplicable in terms to Section 69 CGST summons.
  • Section 438, Code of Criminal Procedure, 1973 — anticipatory bail, held not invokable at the pre-FIR summons stage under Section 69 CGST Act.
  • Article 226, Constitution of India — writ jurisdiction, held not to lie for restraining a statutory authority absent exceptional circumstances.

Decision – In Favour of

Disposed of with limited directions, substantively in favour of the Department — the summons were upheld and no restraint placed on the investigation — with only a minor procedural concession (fixed attendance days) granted to the petitioner on humanitarian grounds.

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.: Writ Petition No.34106 of 2023
  • CNR: Not available on record
  • Coram: Justice P. Sam Koshy and Justice N. Tukaramji
  • Decision Date: 19.12.2023
  • Disposal Nature: Disposed of with directions — limited attendance schedule fixed for investigation

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