2023 (4) TMI 1119 - HC - GST

Jurisdiction of proper officer to issue summon - Validity of summons issued - the Secretary of the club has been summoned under Section 70 of the Central Goods and Services Tax Act, 2017 to give evidence and produce documents including statement showing details of payment received under different heads/services - club services - principles of agency and principles of mutuality - HELD THAT - It can be easily culled out from the plain reading of Section 70 of the CGST Act that it confers upon the proper officer the power to summon any person whose attendance is considered to be 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 a civil court under the provisions of the Code of Civil Procedure, 1908 - In view of the wide scope of Section 70 of the CGST Act, we are not inclined to interfere with the impugned summons. Application disposed off.

Summary

Issues:
The judgment addresses the challenge to summons issued u/s 70 of the Central Goods and Services Tax Act, 2017 to a Members Club established in 1865, regarding the production of financial documents and bank statements.

Summary:
The petitioner, a Members Club established in 1865, challenged the summons dated 13.01.2023 issued by the Superintendent, CGST & CX, Patna, under Section 70 of the CGST Act. The petitioner claimed to operate on the principles of agency and mutuality with its individual members, asserting that the CGST Act was not applicable until the amendment with the insertion of Clause (aa) to Section 7 by the Finance Act, 2021 effective from 01.01.2022.

The Senior Counsel for the petitioner argued that the club should not be directed to produce any documents for transactions before 01.01.2022, citing the amendment post the Supreme Court's decision in State of West Bengal v. Calcutta Club Limited. On the other hand, the Union of India's counsel raised the issue of the petitioner's registration status under the CGST Act or Bihar Goods and Services Tax Act, 2017.

The Court noted the powers conferred by Section 70 of the CGST Act, allowing the proper officer to summon individuals for evidence or document production in inquiries, akin to a civil court proceeding under the Code of Civil Procedure, 1908. The Court declined to interfere with the summons, emphasizing the broad scope of Section 70.

However, the Court granted the petitioner the opportunity to assert before the proper officer that the club had no tax liability under the CGST Act before the 01.01.2022 amendment. The competent officer was directed to consider this plea and any other legal provisions while making further decisions. Consequently, the writ application was disposed of accordingly.