Power to summon persons to give evidence & produce documents under Section 70 of CGST Act, 2017
Pursuant to Section 70 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) Proper Officer(s) under the law 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. Earlier (i.e. before GST) summoning authority needed to approach the civil court through their lawyer after giving intimation to the senior authorities for the execution of summons against the taxpayer. Now there is no need to go to Civil Court for execution of summon in case of deliberate defiance by the summoned taxpayers. Further, there should also be exercised caution and restraint against frivolous use of this provision. This should be used after due justification and as a measure of last resort in cases of deliberate defiance of summons. It should not be used repeatedly as a weapon of attack upon the freedom of the taxpayer rather as a shield of protection for the law of the land.
The summon can be given for giving evidence by way of statement on oath or production of any books or accounts, documents or other things. However, summon can be issued only during pendency of any enquiry under the law.
The extract of provisions may be read as under-
70.Power to summon persons to give evidence and produce documents
(1) The proper officer under this Act shall have 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’ in the same manner, as provided in the case of civil court under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).
(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a “Judicial Proceedings” within the meaning of Section 193 and Section 228 of the Indian Penal Code (45 of 1860).
Proper Officer
The Superintendent is defined to be ‘Proper Officer’ under CGST Act, 2017 (Circular 3/3/2017-GST dated 05th July, 2017). Any superior officer can also exercise power under Section 5(2) of the CGST Act, 2017.
Non-Compliance of Summon
Non-compliance of summon is an offence under Section 174 and 175 of the Indian Penal Code, 1860 (“IPC”). Pursuant to Section 174 of IPC, if a person is legally bound to appear personally and not present, then has committed the offence defined under this section. Person shall be punished with simple imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both. The offence under this section is non-cognizable, bailable, non-compoundable and triable by any Magistrate. Moreover, pursuant to Section 175 of IPC if person is fail to produce documents for which he is legally bound shall be punished with simple imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both.
Submission of false evidence and punishment.
While exercising powers to issue summons provisions of the Code of Civil Procedure, 1908 shall apply and such enquiries shall be deemed as ‘Judicial Proceedings’ under Section 193 and Section 228 of IPC. It means if anyone intentionally gives false evidence in response to summon issued under Section 70 of CGST Act, 2017, or fabricates false evidence for the purpose of being used in any stage of such enquiry, may be punished with imprisonment which may extend to seven years, and shall also be liable to fine as per Section 193 of IPC. Moreover, Section 228 of IPC relates to intentional insult or interruption to public servant sitting in judicial proceeding and punished for it.
Tendering Statement
The summon can be given for giving evidence by way of statement on oath or production of any books or accounts, documents or other things. At the time of tendering the statement, it is quite possible that a person doesn’t have exact knowledge of facts and/or figures or might have forgot the same. In such a case the documents can be referred to refresh memory and statements can be given accordingly.
As per Section 59 of the Indian Evidence Act 1872, “a witness may, while under examination, refresh his memory by referring to any writing made by himself at the time of the transaction concerning which he is questioned, or so soon afterwards that the Court considers it likely that the transaction was at that time fresh in his memory. The witness may also refer to any such writing made by any other person, and read by the witness within the time aforesaid, if when he read it he knew it to be correct.
As regards to presence of advocate at the time of taking statement by Tax Authorities, it has been held that it is not a right of the tax payer to have its counsel along with him. However, looking to the medical or other conditions the counsel may be allowed to attend the proceedings, however no consultation is allowed at the time of recording the statements.
We may also take notice of the views expressed by the Hon’ble Supreme Court in Poolpandiv. Superintendent Central Excise [1992]. The Hon’ble Supreme Court – in that case – was considering a situation as to whether the petitioners were entitled to the presence of their lawyers when they were being questioned during investigation under the provisions of Customs Act, 1962 and the Foreign Exchange Regulation Act, 1973. There was a difference of opinion between the High Courts on this issue. The Supreme Court – in its judgment – has made certain observations while considering as to whether Article 21 is violated if a person is called away from his own house and questioned in that atmosphere of the Customs office without the assistance of his lawyers or his friends. In this context, the following observations of the Supreme Court would be worthwhile to be noticed and quoted:—
“It is true that large majority of persons connected with illegal trade and evasion of taxes and duties are in a position to afford luxuries on lavish scale of which an honest ordinary citizen of this country cannot dream of and they are surrounded by persons similarly involved either directly or indirectly in such pursuits…..The purpose of the enquiry under the Customs Act and the other similar statutes (emphasis supplied by this Court) will be completely frustrated if the whims of the persons in possession of useful information for the departments are allowed to prevail. For achieving the object of such an enquiry if the appropriate authorities be of the view that such persons should be dissociated from the atmosphere and the company of persons who provide encouragement to them in adopting a non-cooperative attitude to the machineries of law, there cannot be any legitimate objection in depriving them of such company. The relevant provisions of the Constitution in this regard have to be construed in the spirit they were made and the benefits thereunder should not be “expanded” to favour exploiters engaged in tax evasion at the cost of public exchequer. Applying the `just, fair and reasonable test’ we hold that there is no merit in the stand of appellant before us.”
It is submitted that issue of summon in any inquiry, to witness or give evidence should be reasonable and not arbitrary. The authority issuing the summon must issue summons to a witness only when the authority considers it necessary for summoning. This necessarily implies application of mind and is guided by the principles of reasonableness in the matter of summoning of witness. Guiding force for issuing summon should be ‘necessity of witness for the purposes of inquiry’.
Writ against Summon
To a limited extent, the Writ Court can go into the question. The Hon’ble Allahabad High Court in Ankit Bhutani Vs Union of India (Writ Tax No. 132 of 2020) has refused to entertain a writ petition of an applicant who consistently evaded summons of GST Intelligence as the court believed that consistent absence was a sign of disinterest to cooperate with the revenue department.
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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.
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