Summon under GST- A Comprehensive Discussion

Summon can be issued by the proper officer to any person whose attendance is considered necessary either for giving evidence or producing a document or any other thing in an inquiry in the same manner, as provided in the case of a civil court under the provisions of Code of Civil Procedure, 1908. In this article we will explore the provisions related to the issuance of summon, responsibilities of the person to whom summon has been issued, consequences for non appearance, validity of summon etc.

The provisions relating to summon are given in section 70 of CGST Act 2017. Section 70 of CGST Act gives powers to a duly authorized proper officer to call upon a person by issuing a summon to present himself before the officer to either give the evidence or produce a document or any other thing in any inquiry which an officer is making. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.

Responsibilities of the person to whom summon has been issued:
A person who is issued summon is legally bound to attend either in person or by an authorized representative and he is bound to state the truth before the officer who has issued the summon upon any subject which is the subject matter of examination and to produce such documents and other things as may be required.

Consequences of non- appearance to summons:

In addition to above, if a person does not appear before the proper officer who has issued the summon, he is liable to a penalty under section 122(3)(d) of CGST Act which states that if a person fails to appear before the officer of central tax, when issued with a summon for appearance to give evidence or produce a document in an inquiry, he shall be liable to a penalty which may extend to twenty five thousand rupees.

Guidelines to be followed in the matters related to investigation:

(i) Power to issue summons are generally exercised by Superintendents after obtaining prior written permission from an officer not below the rank of Deputy/ Assistant Commissioner.

(ii) Where it is not possible to obtain such prior written permission, oral/telephonic permission from such officer must be obtained and the same should be reduced to writing and intimated to the officer according such permission at the earliest opportunity.

(iii) The officer issuing summons should record in file about appearance/ non-appearance of the summoned person and place a copy of statement recorded in file.

(iv) Summons should indicate the name of the offender(s) against whom the case is being investigated unless revelation of the name is detrimental to the cause of investigation.

(v) Issuance of summons may be avoided to call upon statutory documents which are online available on GST portal.

(vi) Senior management officials such as CMD / MD / CEO / CFO / similar officers should be summoned only when there are clear indications in the investigation of their involvement in the decision making process which led to loss of revenue.

(vii) A valid DIN should be mentioned  on the summon as required under Circular No. 122/41/2019-GST dated 5th November, 2019 which makes generation and quoting of Document Identification Number (DIN) mandatory on communication issued by officers of CBIC to tax payers and other concerned persons for the purpose of investigation.

(viii) The summon should issued in the proper format given in the Circular No. 128/47/2019-GST dated 23rd December, 2019.

(viii) The summoning officer must be present at the time and date for which summons is issued. In case of any exigency, the summoned person must be informed in advance in writing or orally.

(ix) All persons summoned are bound to appear before the officers concerned, the only exception being women who do not by tradition appear in public or privileged persons. The exemption so available to these persons under Section 132 and 133 of CPC, may be kept in consideration while investigating the case.

(x) Issuance of repeated summons without ensuring service of the summons must be avoided. Sometimes it may so happen that summoned person does not join investigations even after being repeatedly summoned. In such cases, after giving reasonable opportunity, generally three summons at reasonable intervals, a complaint should be filed with the jurisdictional magistrate alleging that the accused has committed offence under Sections 172 of Indian Penal Code (absconding to avoid service of summons or other proceedings) and/or 174 of Indian Penal Code (non-attendance in obedience to an order from public servant), as inquiry under Section 70 of CGST Act has been deemed to be a "judicial proceedings" within the meaning of Section 193 and Section 228 of the Indian Penal Code. Before filing such complaints, it must be ensured that summons have adequately been served upon the intended person in accordance with Section 169 of the CGST Act. However, this does not bar to issue further summons to the said person under Section 70 of the Act.

Judicial Pronouncements:
1. Rais Khan Versus Add. Commissioner [2024(03)LCX0113]
The Rajasthan High Court held that the issuance of summons under Section 70 of the CGST Act is not hit by Section 6(2)(b) of the CGST Act. The brief facts of the case are as follows;
The Petitioner has challenged the issuance of summons under Section 70 of the GST Act, 2017. It was contended by counsel appearing for the petitioner that State Authorities had initiated the proceedings and as per Section 6(2)(b) of the CGST Act, if a proper officer under the SGST Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper Officer under CGST Act on the same subject matter. It is also contended that since the State Authorities had initiated action, summons under Section 70 of the CGST Act, could not have been issued by the DGGI.

The High Court held that the scope of Section 6(2)(b) and Section 70 of the CGST Act is different and distinct, as the former deals with any proceedings on subject matter, whereas the latter deals with power to issue summon in an inquiry and therefore, the words proceedings and inquiry cannot be mixed up.

2. Kuppan Gounder P.G. Natarajan Versus Directorate General of GST Intelligence [2021(09)LCX0036]:
The appellant/writ petitioner has challenged the order on the ground that the state authority has conducted the search and seizure operations and summons had been issued, order of provisional attachment had been passed and in such situation, the respondent cannot initiate any action and issue summons under Section 70 of the CGST Act and the summons is barred as per the provisions of Section 6(2)(b) of the CGST Act.

In court considered view, the scope of Section 6(2)(b) and Section 70 is different and distinct, as the former deals with any “proceedings on a subject matter/same subject matter” whereas, Section 70 deals with power to summon in an inquiry and therefore, the words “proceedings” and “inquiry” cannot be mixed up to read as if there is a bar for the respondent to invoke the power under Section 70 of the CGST Act. The court found that there is no ground made out by the appellant for quashing the summons issued by the respondent under Section 70 of the CGST Act. 37. The writ appeal fails and the same is dismissed.

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.