Ariticle deals with powers of officers of CGST and SGST to carry out inspection or search of any places of business or a transporter or a warehouse where there is a reason to believe that tax evasion has taken place or is likely to take place.
The word ‘search’ has not been defined in law. As per Black’s Law dictionary search is “an examination of a man’s house or other buildings or premises, or of his person, with a view to the discovery of contraband or illicit or stolen property, or some evidence of guilt to be used in the prosecution of a criminal action for some crime or offence with which he is charged.” As per law dictionary and as noted in different judicial pronouncements, the term ‘search’, in simple language, denotes an action of a government machinery to go, look through or examine carefully a place, area, person, object etc. in order to find something concealed or for the purpose of discovering evidence of a crime. The search of a person or vehicle or premises etc. can only be done under proper and valid authority of law. There are elaborate provisions regarding search under Central Excise, Customs and Service Tax Laws and the provisions under Model GST Law is largely based on these provisions.
However, provision of ‘inspection’ is a new provision. It is a softer provision than search to enable officers to access any place of business of a taxable person and also any place of business of a person engaged in transporting goods or who is an owner or an operator of a warehouse or godown.
The authorisation for inspection or search has to be given in writing by an officer not below the rank of Joint Commissioner. An officer authorised to conduct search can seize goods which are liable to confiscation or seize documents which may be relevant for any proceedings. For this purpose, he has power to force open any premises or any almirah etc. He can also seal the premises. There are certain safeguards provided in the chapter with respect to the power of search and seizure.
The chapter also deals with the following:
i. power of the Central or State Government to prescribe certain documents to be carried by a transporter along with the consignment of goods if the value of the consignment is more than fifty thousand rupees;
ii. power of an officer to arrest a persons who has committed certain specified category of offences along with certain safeguards prescribed in respect of the person arrested;
iii. power of a CGST/ SGST officer to summon a person to give evidence and produce documents;
iv. power of a CGST/SGST officer to have access to any business premises for inspection of various documents;
v. the category of officers who as per law are required to assist CGST/SGST officers in execution of the CGST/ SGST Act.
Section 60: Power of Inspection. Search. Seizure and Arrest
This section deals with circumstances in which the power of inspection, search and seizure can be exercised.
It must be remembered that such inspection can be carried out by an officer of CGST/SGST only upon a written authorisation given by an officer of the rank of Joint Commissioner or above. A Joint Commissioner or an officer higher in rank can give such authorisation only if he has reasons to believe that the person concerned has done one of the following:
i. suppressed any transaction of supply;
ii. suppressed stock of goods in hand;
iii. claimed excess input tax credit;
iv. contravened any provision of the CGST/SGST Act to evade tax.
Authorisation can be given to an officer of CGST/SGST to carry out inspection of any of the following:
i. any place of business of a taxable person;
ii. any place of business of a person engaged in the business of transporting goods whether or not he is a registered taxable person;
iii. any place of business of an owner or an operator of a warehouse or godown.
Search and seizure
An officer of the rank of Joint Commissioner or above can also authorise an officer in writing to carry out search and seize goods, documents, books or things. Such authorisation can be given only where the Joint Commissioner has reasons to believe that any goods liable to confiscation or any documents or books or things relevant for any proceedings are hidden in any place.
‘Reason to Believe’ or ‘Reasonable Belief’
One of the essential conditions to be satisfied before authorizing/conducting the inspection or search in respect of all the provisions pertaining to Central Excise, Service Tax and Customs is ‘reason to believe’. The same expression has been borrowed in the Model GST Law. Reason to believe is to have knowledge of facts which, although not amounting to direct knowledge, would cause a reasonable person, knowing the same facts, to reasonably conclude the same thing. As per Section 26 of the IPC, 1860, “A person is said to have ‘reason to believe’ a thing, if he has sufficient cause to believe that thing but not otherwise.” The word ‘believe’ is much stronger than the word ‘suspect’. A belief in the existence of a thing requires a more solid foundation than in the case of a mere suspicion. ‘Reason to believe’ contemplates an objective determination based on intelligent care and evaluation as distinguished from a purely subjective consideration. It has to be and must be that of an honest and reasonable person based on relevant material and circumstances. Although the officer is not required to state the reasons for such belief before issuing an authorization for search, he has to disclose the material on which his belief was formed. ‘Reason to believe’ need not be recorded invariably in each case. However, it would be better if the materials / information etc. are recorded before issue of search warrant or before conducting search. In case the authorizing officer’s satisfaction of reasonable belief is questioned in any collateral proceedings, only then he has to produce relevant evidence which formed the basis of his belief. Generally, courts do not go into the question of sufficiency of material to form such belief. The existence of such material is considered sufficient. Only in those cases where seizure is unreasonable and perverse and that no reasonable person could have reached that conclusion, procedures become unauthorized.
Search Warrant and its content
The authority to conduct search is generally called search warrant. The competent authority to issue search warrant is an officer of the rank of Joint Commissioner or above. A search warrant must indicate the existence of a reasonable belief leading to the search. Search Warrant should contain following details:
i. the violation under the Act,
ii. the premise to be searched,
iii. the name and designation of the person authorized for search,
iv. the name of the issuing officer with full designation along with his round seal,
v. date and place of issue,
vi. serial number of the search warrant,
vii. period of validity i.e. a day or two days etc.
Liability to confiscation
As per section 70 of Model GST Law, goods become liable to confiscation when any person does the following:
(i) supplies any goods in contravention of any of the provisions of this Act or rules made thereunder leading to evasion of tax;
(ii) does not account for any goods on which he is liable to pay tax under this Act;
(iii) supplies any goods liable to tax under this Act without having applied for the
(iv) contravenes any of the provisions of the CGST/SGST Act or rules made thereunder with intent to evade payment of tax.
Power of an officer during search
An officer carrying out a search, has the power to break open its door if access to the premises is denied. Similarly, while carrying out search within the premises, he can break open any almirah or box if access to such almirah or box is denied and in which any goods, account, registers or documents are suspected to be concealed. He can also seal the premises if access to it denied.
Procedure for conducting search
Section 60(8) prescribes that searches must be carried out in accordance with the provisions of Code of Criminal Procedure, 1973. Section 100 of the Code of Criminal Procedure describes the procedure for search as below:‑
i. Whenever any place liable to search or inspection under this Chapter, is closed, any person residing in, or being in charge of, such place, shall, on demand of the officer or other person executing the warrant, and on production of the warrant, allow him free ingress thereto, and afford all reasonable facilities for a search therein.
ii. If ingress into such place cannot be so obtained, the officer or other persons executing the warrant may proceed in the manner provided by sub-section (2) of section 47.
iii. Where any person in or about such place is reasonably suspected of concealing about his person any article for which search should be made, such person may be searched and if such person is a woman, the search shall be made by another woman with strict regard to decency.
iv. Before making a search under this Chapter, the officer or other person about to make it shall call upon two or more independent and respectable inhabitants of the locality in which the place to be searched is situated or any other locality, if no such inhabitant of the said locality is available or is willing to be a witness to the search, to attend and witness the search and may issue an order in writing to them or any of them so to do.
v. The search shall be made in their presence, and a list of all things seized in the course of such search and of the places in which they are respectively found shall be prepared by such officer or other person and signed by such witnesses; but no person witnessing a search under this section shall be required to attend the court as a witness of the search unless specially summoned by it.
vi. The occupant of the place searched, or some person in his behalf shall, in every instance be permitted to attend during the search, and a copy of the list prepared under this section, signed by the said witnesses, shall be delivered to such occupant or person.
vii. When any person is searched under sub-section (3), a list of all things taken possession of shall be prepared, and a copy thereof shall be delivered to such person.
viii. Any person who, without reasonable cause, refuses or neglects to attend and witness a search under this section, when called upon to do so by an order in writing delivered or tendered to him, shall be deemed to have committed an offence under section 187 of the Indian Penal Code,1860.
Sub-section 2 above of section 100 makes a reference to section 47(2) of Cr.P.C. which provides for forceful entry. Section 47(2) of Cr.P.C. reads as under:
If ingress to such place cannot be obtained under sub-section (1), it shall be lawful in any case for a person acting under a warrant and in any case in which a warrant may issue, but cannot be obtained without affording the person to be arrested an opportunity of escape, for a police officer to enter such place and search therein, and in order to effect an entrance into such place, to break open any outer or inner door or window of any house or place, whether that of the person to be arrested or of any other person, if after notification of his authority and demand of admittance duly made, he cannot otherwise obtain admittance:
Provided that, if any such place is an apartment in the actual occupancy of a female (not being the person to be arrested) who, according to custom, does not appear in public, such person or police officer shall, before entering such apartment, give notice to such female that she is at liberty to withdraw and shall afford her every reasonable facility for withdrawing, and may then break open the apartment and enter it.
Certain Basic Requirement to be observed during Search:
Vitiation of Search
Search without a valid search warrant (i.e. issued by other than a competent authority) results in an illegal search without authority of law. However, due to this reason, the accused cannot get benefit. Accordingly, evidence collected even during an illegal search and seizure is considered admissible in trial and adjudication proceedings.
The term ‘seizure’ has not been specifically defined in the Model GST Law. In Law Lexicon Dictionary, ‘seizure’ is defined as the act of taking possession of property by an officer under legal process. It generally implies taking possession forcibly contrary to the wishes of the owner of the property or who has the possession and who was unwilling to part with the possession. It may not always be synonymous with manual detention or physical retention. It may happen that physical removal of goods is not possible then also it can be seized by the tax authority by giving notice to that effect to the owner or who has the possession of goods. The ownership of seized goods is suspended till finalisation of the adjudication proceedings. If it is confiscated by an order issued by a competent authority which attains finality then only the ownership is transferred to the Government. If it is not confiscated, then the ownership is again transferred to the original owner of the goods. It is to be noted that seizure of goods and documents can be made in relation to an investigation concerning supply of goods but in an investigation relating to supply of services, mostly only documents will be seized.
Distinction in law between ‘Seizure’ and ‘Detention’
Denial of access to the owner of the property or the person who possesses the property at a particular point of time by a legal order/notice is called detention. The purpose of detention is to prevent that property being removed or used by the owner of the property or the person who possesses the property for some time. In detention the possession of the property is not taken away by the department, but in seizure the possession is transferred from the owner to the department. The detention order is served when it is not practicable to seize the goods at that particular point of time. Secondly, when it is suspected that the goods are liable to confiscation then detention order is issued. As soon as the ‘suspicion’ is converted into ‘reasonable belief after enquiry/ investigation, the detained goods are formally seized because seizure can be made only on the basis of ‘reasonable belief that the goods are liable to confiscation. Taking possession by the department is necessary condition of seizure. During the period of seizure, the ownership of the seized goods is suspended till finalisation of the adjudication proceedings. It is to be noted here that no confiscation can be ordered without seizure.
Certain safeguards are provided in section 60 of Model CGST/SGST Law in respect of the power of search or seizure. These are as follows:
i. Seized goods or documents should not be retained beyond the period necessary for their examination;
ii. Photocopies of the documents can be taken by the person from whose custody documents are seized;
iii. For seized goods, if a notice is not issued within sixty days of its seizure, goods shall be returned to the person from whose possession it was seized. This period of sixty days can be extended on justified grounds up to a maximum period of six months;
iv. An inventory of seized goods shall be made by the seizing officer;
v. Certain categories of goods to be specified under Model GST Rules (such as perishable, hazardous etc.) can be disposed of immediately after seizure;
vi. Provisions of Code of Criminal Procedure 1973 relating to search and seizure shall apply. However, one important modification is in relation to sub-section (5) of section 165 of Code of Criminal Procedure – instead of sending copies of any record made in course of search to the nearest Magistrate empowered to take cognizance of the offence, it has to be sent to the Principal Commissioner/ Commissioner of CGST/ Commissioner of SGST .
Section 61: Inspection of goods in movement:
This section gives power to the Central or State Government to prescribe certain documents (which will be done under Model GST Rules) that must be carried by a person incharge of a conveyance (such as truck, bus etc.) if the conveyance is carrying any consignment of goods of a value of more than fifty thousand rupees. The taxpayer who is putting the goods in a conveyance will generate this document on the common portal and hand over to the person incharge of the conveyance. If a truck is carrying several consignments and the value of an individual consignment is less than fifty thousand rupees but the combined value of different consignments in the truck is more than fifty thousand rupees, no document as prescribed in this section needs to be carried by the person incharge of the truck. However, if a truck is carrying six consignments and out of these two are of a value of more than fifty thousand rupees, the prescribed document will be generated by these two consignors and handed over to the person incharge of the truck. This document will need to be shown upon demand by any officer conducting any checks of vehicles on the road.
Section 62: Power to Arrest:
The term ‘arrest’ has not been defined in the Model GST Law. However, as per judicial pronouncements, it denotes ‘the taking into custody of a person under some lawful command or authority’. In other words a person is said to be arrested when he is taken and restrained of his liberty by power or colour of lawful warrant. Section 46 of the Cr.P.C. 1973 provides that a police officer or any other person making an arrest shall actually touch or confine the body of the person to be arrested, unless there be a submission to the custody by word or action. It further provides that if such person forcibly resists the endeavour to arrest him, or attempts to evade the arrest, such police officer or other person may use all means necessary to effect the arrest. However, this section also lays down that nothing in this section gives a right to cause the death of a person who is not accused of an offence punishable with death or with imprisonment for life. Article 22 of the Constitution of India deals with protection against arrest and detention in certain cases.
Necessity of assuming control over person
To constitute an arrest it is necessary that the officers should assume custody and control over the person, either by force or with his consent, and it has been held that neither the utterance of words indicating an intention to arrest on the part of the person uttering them, nor the reading of the warrant is of itself sufficient.
The Commissioner of CGST/SGST can authorise a CGST/SGST officer to arrest a person if he has reasons to believe that the person has committed an offence attracting a punishment prescribed under section 73 (1)(i), 73 (1)(ii) and 73 (2) of the CGST/SGST Act. This essentially means that a person can be arrested only where the tax evasion is more than fifty lakhs rupees or where a person has earlier been convicted for an offence under section 73 of the Model CGST/SGST Act.
There are certain safeguards provided under section 62 for a person who is placed under arrest. These are:
i. If a person is arrested for a cognizable offence, he must be informed in writing of the grounds of arrest and he must be produced before a magistrate within 24 hours of his arrest;
ii. If a person is arrested for a non-cognizable and bailable offence, the Deputy/ Assistant Commissioner of CGST/SGST can release him on bail and he will be subject to the same provisions as an officer incharge of a police station under section 436 of the Code of Criminal Procedure, 1973;
iii. All arrest must be in accordance with the provisions of the Code of Criminal Procedure, 1973 relating to arrest.
Post arrest formalities
Precautions to be taken during arrest
The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating to arrest and the procedure thereof must be adhered to. It is therefore necessary that all field officers of CGST/SGST be fully familiar with the provisions of the Code of Criminal Procedure, 1973.
One important provision to be taken note of is section 57 of Cr.P.C., 1973 which provides that a person arrested without warrant shall not be detained for a longer period than under all the circumstances of the case is reasonable but this shall not exceed twenty fore hours (excluding the journey time from place of arrest to the Magistrate’s court). Within this period, as provided under section 56 of Cr.P.C., the person making the arrest shall send the person arrested without warrant before a Magistrate having jurisdiction in the case.
In a landmark judgment in the case of D.K. Basu v. State of West Bengal reported in 1997 (1) SCC 416, the Hon’ble Supreme Court has laid down specific guidelines required to be followed while making arrests. While this is in relation to police, it needs to be followed by all departments having power of arrest. These are as under:
i. The police personnel carrying out the arrest and handling the interrogation of the arrestee should bear accurate, visible and clear identification and name tags with their designations. The particulars of all such police personnel who handle interrogation of the arrestee must be recorded in a register.
ii. The police officer carrying out the arrest shall prepare a memo of arrest at the time of arrest and such memo shall be attested by at least one witness, who may be either a member of the family of the arrestee or a respectable person of the locality from where the arrest is made. It shall also be counter signed by the arrestee and shall contain the time and date of arrest.
iii. A person who has been arrested or detained and is being held in custody in a police station or interrogation centre or other lock up, shall be entitled to have one friend or relative or other person known to him or having interest in his welfare being informed, as soon as practicable, that he has been arrested and is being detained at the particular place, unless the attesting witness of the memo of arrest is himself such a friend or a relative of the arrestee.
iv. The time, place of arrest and venue of custody of an arrestee must be notified by the police where the next friend or relative of the arrestee lives outside the district or town through the Legal Aid Organisation in the District and the police station of the area concerned telegraphically within a period of 8 to 12 hours after the arrest.
v. An entry must be made in the diary at the place of detention regarding the arrest of the person which shall also disclose the name of the next friend of the person who has been informed of the arrest and the names and particulars of the police officials in whose custody the arrestee is.
vi. The arrestee should, where he so requests, be also examined at the time of his arrest and major and minor injuries, if any present on his/her body, must be recorded at that time. The ‘Inspection Memo’ must be signed both by the arrestee and the police officer effecting the arrest and its copy provided to the arrestee.
vii. The arrestee should be subjected to medical examination by the trained doctor every 48 hours during his detention in custody by a doctor on the panel of approved doctors appointed by Director, Health Services of the concerned State or Union Territory, Director, Health Services should prepare such a panel for all Tehsils and Districts as well.
viii. Copies of all the documents including the memo of arrest, referred to above, should be sent to the Magistrate for his record.
ix. The arrestee may be permitted to meet his lawyer during interrogation, though not throughout the interrogation.
x. A police control room should be provided at all district and State headquarters where information regarding the arrest and the place of custody of the arrestee shall be communicated by the officer causing the arrest, within 12 hours of effecting the arrest and at the police control room it should be displayed on a conspicuous notice board.
There is no prescribed format for arrest memo but an arrest memo must be in compliance with the directions in the judgement of the Hon’ble Supreme Court in the case of D.K. Basu v. State of West Bengal reported in 1997 (1) SCC 416. The arrest memo should include:
Further there are certain modalities that should be complied with at the time of arrest and pursuant to an arrest, which include the following :
It shall be the duty of the person having the custody of an arrested person to take reasonable care of the health and safety of the arrested person.
Some broad guidelines for arrest followed in CBEC
Decision to arrest needs to be taken on case-to-case basis considering various factors, such as, nature and gravity of offence, quantum of duty evaded or credit wrongfully availed, nature and quality of evidence, possibility of evidences being tampered with or witnesses being influenced, cooperation with the investigation, etc. Power to arrest has to be exercised after careful consideration of the facts of the case which may include:
i. to ensure proper investigation of the offence;
ii. to prevent such person from absconding;
iii. cases involving organised smuggling of goods or evasion of customs duty by way of concealment;
iv. master minds or key operators effecting proxy/benami imports/exports in the name of dummy or non-existent persons/IECs, etc;
v. where the intent to evade duty is evident and element of mens rea /guilty mind is palpable;
vi. prevention of the possibility of tampering with evidence;
vii. intimidating or influencing witnesses and;
viii. large amounts of evasion of duty or service tax at least exceeding 50 lakh rupees.
Cognizable and non-cognizable offence:
Generally, cognisable offence means a police officer has the authority to make an arrest without a warrant and to start an investigation with or without the permission of a court. By contrast, in the case of a non-cognisable offence, a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiated without a court order. The police can file a FIR only for cognisable offences.Normally, serious offences are defined as cognisable and usually carry a sentence of 3 years or more. Cognizable offences would be severe acts such as murder, rape, aggravated assault, kidnapping. These are the sorts of crimes that Police may act independently to arrest suspects immediately, and so they are authorized to affect the arrest and to mount a further investigation, autonomously of the Court.
Non-cognizable offences would be not very severe acts like shoplifting, failure to renew a license, petty theft. For these, Police are not authorized to act independently to arrest a suspect and must present a case to the Court in order to prosecute an arrest, at which time they will also be charged with investigating the case fully.
The dividing line between cognizable and non-cognizable is the extent harm to the person of a victim or of risk to life or limb of others that may be involved, or the gross extent of loss of property involved or possible.
Similar principle has to be followed in regard to offences committed under the CGST/SGST Act. In section 73 (4) of Model CGST/SGST Law, it is provided that the offences relating to taxable goods and /or services where the amount of tax evaded exceeds Rs. 2.5 crores, shall be cognizable and non-bailable. Other offences under the act are non-cognizable and bailable.
In case a person is arrested for a non-cognizable and bailable offence, the officer carrying out the arrest can grant him bail in accordance with Section 436 of the Code of Criminal Procedure, 1973. This section provides that when any person other than a person accused of a non-bailable offence is arrested or detained without warrant by an officer in charge of a police station, or appears or is brought before a Court, and is prepared at any time while in the custody of such officer or at any stage of the proceeding before such Court to give bail, such person shall be released on bail. It further provides that where such officer or Court, if he or it thinks fit, may, instead of taking bail from such person, discharge him on his executing a bond without sureties for his appearance.
Section 63: Power to summon persons to give evidence and produce documents: Introduction:
In order to have a successful investigation, it is often necessary to question a suspect or a witness and seek information from him to unearth the tax evaded. Calling suspect or witness to give evidence or produce documents is an important step in investigation which helps to convert the findings into admissible evidence.
Summon, as understood in legal parlance, is intimation requiring a person to whom it is issued to appear to give evidence and /or produce documents, etc. The indirect tax statutes, namely, the Customs Act, 1962, Central Excise Act, 1962 and Finance Act, 1994 have provisions which empower the designated officers to summon witnesses to give evidence and/or to produce documents. The provision of Section 63 of CGST/SGST Act is largely borrowed from Section 108 of Customs Act, 1962 and Section 14 of the Central Excise Act, 1944.
Section 63 of CGST/SGST Act gives powers to a duly authorised CGST/SGST officer to call upon a person by issuing a summon to present himself before the officer issuing the summon to either give evidence or produce a document or any other thing in any inquiry which an officer is making. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.
A person who is issued a summon is legally bound to attend either in person or by an authorised representative, as such officer may direct. Thus it is to be noted that officer has the discretion to summon a person himself or to allow him to be represented by an authorised representative. The exemptions under section 132 and 133 of Code of Civil Procedure, 1908 applies to requisitions for attendance under the CGST/SGST Act.
A person summoned is bound to state the truth before the officer who has issued the summon upon any subject respecting which they are examined or make statements and produce such documents and other things as may be required. This proceeding will be deemed to be a ‘judicial proceeding’ as understood under section 193 and section 228 of the Indian Penal Code, 1860.
Section 193 of IPC, 1860 contains penal provision for giving false evidence under summons and section 228 of IPC, 1860 contains penal provisions for intentionally insulting or interrupting the Officer sitting in summons proceedings. Accordingly these provisions of IPC can be invoked where the person summoned under CGST/SGST Act gives false evidence or interrupts the proceedings under summons.
Sections 172, 174 and 175 of Indian Penal Code, 1860are also relevant as they contain penal provisions in case of person:
i. Absconding to avoid service of summons or other proceeding;
ii. Non-attendance in obedience to an order from public servant;
iii. Omission to produce document or electronic record to public servant by person legally bound to produce it.
Under Civil Procedure Code, 1908, (CPC), there are some categories of persons who are exempt from being summoned. Section 132 of CPC provides exemption to the women who, according to the customs and manners of the country, ought not to be compelled to appear in public shall be exempt from personal appearance in Court. Section 133 of CPC provides entitlement to exemption from personal appearance in Court to some dignitaries, such as the President of India, the Vice President of India and some other high dignitaries of the State/ Government. All these exemptions will apply in respect of summons issued under the CGST/SGST Act.
The power to summon has a vital bearing in an enquiry under the CGST/SGST Act. The evidence so gathered will have a bearing on the quality of adjudication proceedings. Status of the person summoned is of no consequence. However, sufficient care should be taken to summon only such persons who would have first-hand knowledge of material relevant to the investigation being conducted. It must be ensured that the procedural safeguards are not violated.
The Central Board of Excise and Customs (CBEC) in the Department of Revenue, Ministry of Finance has issued guidelines from time to time to ensure that summons provisions are not misused in the field. Some of the important highlights of these guidelines are given below:
i. summons are to be issued as a last resort where assesses are not co-operating and this section should not be used for the top management;
ii. the language of the summons should not be harsh and legal which causes unnecessary mental stress and embarrassment to the receiver;
iii. summons by Superintendents should be issued after obtaining prior written permission from an officer not below the rank of Assistant Commissioner with the reasons for issuance of summons to be recorded in writing;
iv. where for operational reasons, it is not possible to obtain such prior written permission, oral/telephonic permission from such officer must be obtained and the same should be reduced to writing and intimated to the officer according such permission at the earliest opportunity;
v. in all cases, where summons are issued, the officer issuing summons should submit a report or should record a brief of the proceedings in the case file and submit the same to the officer who had authorised the issuance of summons;
vi. senior management officials such as CEO, CFO, General Managers of a large company or a PSU should not generally be issued summons at the first instance. They should be summoned only when there are indications in the investigation of their involvement in the decision making process which led to loss of revenue.
Precautions while issuing summons:‑
The following precautions should generally be observed when summoning a person:-
(i) A summon should not be issued for appearance where it is not justified. The power to summon can be exercised only when there is an inquiry being undertaken and the attendance of the person is considered necessary.
(ii) Normally, summons should not be issued repeatedly. As far as practicable, the statement of the accused or witness should be recorded in minimum number of appearances. Repeated summons often lead to complaints of harassment and embarrassment before the Courts of Law.
(iii) Respect the time of appearance given in the summons. No person should be made to wait for long hours before his statement is recorded except when it has been decided very consciously as a matter of strategy.
(iv) Preferably, statements should be recorded during office hours; However an exception could be made regarding time and place of recording statement having regard to the facts in the case.
Course of Action in Case of Non-response to Summons
A format of summon used Section 14 of Central Excise Act, 1944 is reproduced below for guidance:
Section 64: Access to business premises
This provision of law is meant to allow an audit party of CGST/SGST or C&AG or a cost accountant or chartered accountant nominated under section 50 of CGST/SGST Act, access to any business premises without issuance of a search warrant for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue. However, a written authorisation is still to be issued by an officer of the rank of Additional/Joint Commissioner of CGST or SGST. This provision facilitates access to a business premise which is not registered by a taxable person as a principal or additional place of business but has books of accounts, documents, computers etc. which are required for audit or verification of accounts of a taxable person.
Upon demand by the proper officer or audit party or cost accountant or chartered accountant so authorised, the person incharge of premises will have to produce the records maintained by a registered taxable person at the said premises for his scrutiny within a reasonable time. However, records must be produced within fifteen working days of making the demand or such further extended period that may be allowed by the person who made the request for the documents.
Certain documents are specifically listed in the section but if any other relevant records are maintained at the said premises, they will also need to be produced. The listed documents are as follows:
(i) the records as prepared or maintained by the registered taxable person and declared to the CGST/SGST officer as may be prescribed;
(ii) trial balance or its equivalent;
(iii) Statements of annual financial accounts, duly audited, wherever required;
(iv) cost audit report, if any, under section 148 of the Companies Act, 2013;
(v) the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961.
Section 65: Officers required to assist CGST/SGST officers:
In the course of implementing the various provisions of the CGST/SGST Act, help of some other agencies may also be required. For example, in conducting a raid, help of police officers may be required. Similarly, for recovery of any arrear of tax, help of land revenue officers may be needed. Under this provision, certain categories of officers have been empowered and also legally required to assist CGST/SGST officers in the execution of this Act. The specified category of officers are:
ii. Customs ;
iv. Officers of state/ central government engaged in collection of GST;
v. Officers of state/ central government engaged in collection of land revenue;
vi. All village officers;
vii. Any other class of officers as may be notified by central/ state government.
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