2019 (7) TMI 94 - HC - Service Tax

Validity of Summons issued u/s 70 of (CGST) Act, 2017 - allegation of evasion of service tax - quashing of the notice for personal hearing - request of assessee to decide his representation before initiating any proceedings - HELD THAT - Under Section 70 of the (CGST) Act, 2017, the proper officer under this Act shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of civil court under the provisions of the Code of Civil Procedure, 1908 and Subsection (2) of Section 70 of the Act of 2017 envisages that every such inquiry referred to in Sub-section (1) shall be deemed to be a judicial proceedings within the meaning of section 193 and section 228 of the Indian Penal Code, and the fact as borne out from the record that, prima facie , opinion has been formulated that the petitioner has evaded the tax, we are not inclined to cause any indulgence. The petitioner has utterly failed to establish that the proceedings u/s 70 of the (CGST) Act, 2017 can only be taken recourse to, after decision u/s 73 of the Act. Petition dismissed.

Summary

Issues:
1. Petitioner's obligation to provide financial information for specified years.
2. Issuance of summons under different tax laws for document production.
3. Petitioner's response to summons and request for decision on tax liability.
4. Notice for personal hearing and petitioner's challenge to its quashment.
5. Interpretation of Section 70 of the CGST Act, 2017 regarding summoning powers.

Analysis:
1. The petitioner, a Civil Contractor with Service Tax registration, was asked to provide various financial documents for the financial years 2013-14 and 2014-15. Subsequently, he was summoned under different tax laws to produce additional records, including ST-3 returns, income tax returns, and reconciliation statements. Despite repeated reminders and warnings of consequences for non-compliance, the petitioner evaded responses and sought a decision on his tax liability before submitting the required documents.

2. The petitioner received a notice for a personal hearing, challenging it through a petition seeking its quashment and a direction for authorities to decide his representation before initiating any proceedings. The court examined the powers of summoning under Section 70 of the CGST Act, 2017, which allows the proper officer to summon individuals for evidence or document production. The court noted that the inquiry under this section is considered a judicial proceeding, and as there was a prima facie opinion of tax evasion by the petitioner, no indulgence was granted in the matter.

3. The court held that the petitioner failed to establish that proceedings under Section 70 of the CGST Act, 2017 should only follow a decision under Section 73 of the Act. Consequently, the court refrained from providing any relief to the petitioner, leading to the dismissal of the petition without costs.