2024 (3) TMI 1086 - HC - GST

Validity of summons issued u/s 70 - Proper officer - Whether issuance of summons u/s 70 of the CGST Act is hit by Section 6(2)(b) of the CGST Act ? - HELD THAT - It is evident that against the issuance of notice by the State Authorities, petitioner had preferred writ petition before the High Court and had not put in appearance before the State Authorities. In the judgments referred to by counsel for the respondents, it is held that 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 to read as if there is a bar for the respondents to invoke the power u/s 70 of the CGST Act. Madras High Court in Kuppan Gounder P.G. Natarajan vs. Directorate General of GST Intelligence, 2021 (9) TMI 713 - MADRAS HIGH COURT , wherein, Court has also held that in issuance of summons for conducting an inquiry and to obtain a statement from the appellant cannot be construed to be bar u/s 6(2)(b) of the CGST Act. Thus, we are of the considered view that issuance of summons u/s 70 of the CGST Act is not hit by Section 6(2)(b) of the CGST Act and the present Civil Writ petition being devoid of merits is accordingly dismissed. Stay application stands disposed.

Summary

Issues:
The judgment involves a challenge to the issuance of summons under Section 70 of the Central Goods & Services Tax Act, 2017, by the Directorate General of Goods and Services Tax Intelligence (DGGI) despite proceedings initiated by State Authorities.

Details of Judgment:

1. The petitioner challenged the summons issued under Section 70 of the CGST Act by the DGGI, citing that State Authorities had already initiated proceedings on the same subject matter as per Section 6(2)(b) of the Act, which prohibits dual proceedings. The definition of "proper Officer" under Section 2(91) was also highlighted by the petitioner.

2. The petitioner argued that Guidelines issued by the GST-Investigation Wing on summons under Section 70 are binding, referencing judgments from other High Courts. The respondents, including the Union of India, opposed the petition, claiming the summons were valid and necessary due to alleged tax evasion and misuse of input tax credit.

3. The State's Advocate General supported the Union of India's stance, emphasizing that in cases of tax evasion or benefit claims, the Union has the authority to initiate proceedings.

4. The Union of India's counsel relied on various judgments to support their argument that the summons under Section 70 were justified despite State Authorities' actions.

5. After considering the arguments and relevant provisions, the Court examined previous judgments cited by both parties. The Court noted that the scope of Section 6(2)(b) and Section 70 of the CGST Act differs, with one dealing with proceedings and the other with the power to issue summons for inquiries.

6. The Court referenced specific cases where High Courts held that the issuance of summons does not amount to initiating proceedings under Section 6(2)(b) of the CGST Act. Consequently, the Court concluded that the summons under Section 70 were not in violation of Section 6(2)(b) and dismissed the Civil Writ Petition for lacking merit.