ISSUE OF SUMMONS AND PROCEEDINGS UNDER GST LAW

[Dr. Sanjiv Agarwal]

CGST Act, 2017 empowers the proper officer under the GST Act in the process of making any enquiry and to give evidence or to produce a document or any other thing. This article covers power to issue summons, precautions to be observed while issuing summons, obligations of person summoned and nature of summon proceedings under section 70 of CGST Act, 2017.

Power to issue summons (sub-section 1)

According to section 70, where any officer has reasons to believe that any person is required in attendance to give evidence and produce documents, he may authorize any officer to issue summons. Any proper officer, duly authorized by the competent authority shall have the 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, which such officer is making.

Precautions to be observed while issuing summons

Under section 70(1), a summon may be issued for –

1. production of specified documents or other things (say, a contract or audit report)
2. production of all documents or things of a particular description (say, financial statements)

The condition is that such documents or things must be in the possession or control of the person to whom summon is being served.

Obligations of person summoned

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.

All persons so summoned shall be bound to attend, either in person or by an authorised representative, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents and other things, as may be required. However, the exemptions under section 132 and 133 of the Code of Civil Procedure, 1908 shall be applicable to requisitions for attendance.

Section 132 exempts certain women (such as pardanashin) from personal appearance. Section 132 exempts certain other persons like president, vice president, speaker of parliament, union ministers, Supreme Court judges, governors of states, administrators of union territories, speakers of state legislatures, chairman of state legislative councils, ministers of states, high court judges and rulers of former Indian states.

The persons summoned are obligated to/have rights as follows:

(a)   attend to the summons;

(b)  attend in person or through an authorised representative, as the officer issuing summon may direct (he may direct to attend in person);

(c)   state the truth upon any subject in respect of which they are examined;

(d)  make statements (recording of statement by officers);

(e)   produce documents or things as required;

(f)   seek exemption under section 132 and 133 of Code of Civil Procedure regarding attendance.

Nature of summon proceedings (sub-section 2)

As per section 70(2) of the CGST Act, 2017, every act of summoning a person by issuance of summons to give evidence and produce documents in enquiries, shall be deemed to be judicial proceedings as provided for in section 193 and 228 of Indian Penal Code, 1860. Section193 deals with punishment for false evidence. Section 228 provides action in case of intentional insult or interruption to public servant sitting in a judicial proceeding.

Presence of advocate / CA during recording of statement

Summon proceedings under section 70 of CGST Act, 2017 are generally resorted to for establishing facts under an enquiry or investigation and collecting information / documents / facts and other evidences including recording of statement of the person summoned which may later be used as an evidence or witness in proceedings. Though, statement is recorded of the person summoned, it is generally seen that  such persons make a demand or request for being represented by a counsel / advocate / chartered accountant or any other authorized person. Infact, the summon makes a mention of the personal presence and that the person summoned cannot be attended to through authorized representative. Section 70 itself makes it clear that there is a requirement of personal presence or attendance of the summoned person. It is judicially settled that it is not taxpayer’s right to avail such facility during summon proceedings and presence of lawyer / chartered accountant etc. is not required during examination or interrogation under summon proceedings [Refer:  POOLPANDI VERSUS SUPERINTENDENT, CENTRAL EXCISE - 1992 (5) TMI 147 - SUPREME COURT]. 

However, courts have been taking a view that though the presence of CA / advocate may be allowed, they may be asked to watch the proceedings from a distance so that they are not able to hear the proceedings.  Reference can be made to SENIOR INTELLIGENCE OFFICER VERSUS JUGAL KISHORE SAMRA - 2011 (7) TMI 910 - SUPREME COURT, the relevant para of which is extracted below:

“Taking a cue, therefore, from the direction made in D.K. Basu and having regard to the special   facts and circumstances of the case, we deem it appropriate to direct that the interrogation of the respondent may be held within the sight of his advocate or any other person duly authorized by him. The advocate or the person authorized by the respondent may watch the proceedings from a distance or from behind a glass partition but he will not be within the hearing distance and it will not be open to the respondent to have consultations with him in the course of the interrogations.”