2022 (2) TMI 84 - HC - GST

Jurisdiction - power of State authority to issue summons - violation of principle of separation of powers - constitutionality of Section 70 of the CGST Act - HELD THAT - As is well known merging several taxing statutes the Central as well as State legislatures have framed GST laws. Like other taxing statues these Acts also have charging provisions the machinery provisions as well as provisions for tax collection and provisions for arresting tax evasions. Chapter XIV contained in the RGST Act pertains to inspection search seizure and arrest. Section 67 contained in the said chapter gives power of inspection and search and seizure to the proper officer not below the rank of joint Commissioner who under certain circumstances can exercise such powers. The provision of section 70 thus while empowering the proper officer to summon a person to give evidence or to produce documents controls such exercise of powers by providing that the summons may be issued where a proper officer considers it necessary that such person is required to give evidence or to produce certain documents. These powers are not thus unguided or uncanalised. Further such powers are to be exercised in the same manner as would be exercisable by a civil court under the Code of Civil Procedure. Order 5 of Code of Civil Procedure pertains to issue and service of summons under the C.P.C. - powers under sub-Section (1) of Section 70 thus would be exercisable in the manner provided therein. In order to ensure that the information that a person so summoned provides carries a certain sanctity Sub-section (2) of Section 70 provides that every such enquiry under sub-Section (1) would be deemed to be judicial proceeding within the meaning of Section 193 and 228 of IPC. It is not found that such powers are in any manner beyond the competence of legislature or opposed to any of the fundamental rights or other provisions of the Constitution of India. It is also recalled that Section 14C of the Central Excise Act and Section 108 of the Customs Act contain similar provisions authorizing the appropriate officer with the power to summon attendance of a witness for recording statement or for production of documents. The vires of the said section must be upheld. Petition dismissed.

Summary

Issues:
Challenge to the vires of Section 70 of Rajasthan Goods and Service Tax Act, 2017 and challenge to the summons issued under Section 70.

Analysis:
The petitioner challenged the constitutionality of Section 70 of the RGST Act, arguing that it violates the principle of separation of powers. Section 70 empowers the proper officer to summon a person to give evidence or produce documents, similar to a civil court under the Code of Civil Procedure. The provision controls the exercise of powers by requiring the summons to be issued when the proper officer deems it necessary for the person to provide evidence or produce documents. The summons are to be issued in the same manner as a civil court under the Code of Civil Procedure, ensuring a certain sanctity to the information provided. The High Court found that these powers are not beyond the competence of the legislature and do not violate any fundamental rights or provisions of the Constitution of India. Similar provisions in other statutes like the Central Excise Act and Customs Act were cited to support the validity of Section 70. The Court held that the vires of the section must be upheld.

The Court distinguished the case of Madras Bar Association vs. Union of India, stating that it pertained to the constitution of various tribunals and the independence of the judiciary, which was not directly relevant to the present case. Regarding the challenge to the summons itself, the Court noted that the authority had indicated the documents required to be carried by the petitioner. While acknowledging that an unreasonably short time for compliance with the summons could be grounds for seeking an extension or court intervention, the Court found that since the summons was issued well in advance, it had already worked itself out. Therefore, the Court dismissed the petition challenging the vires of Section 70 and the summons issued under it.