Case Law Details
Rakesh Janghu Vs Union of India & others (Punjab and Haryana High Court)
The petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India seeking to quash the inquiry proceedings initiated under the Central Goods and Services Tax Act, 2017. The petitioner challenged multiple summons issued under Section 70 of the Act on 23.06.2020, 10.08.2020, 08.12.2021, 21.12.2021, 22.03.2022, 28.04.2022, 20.05.2022 and 02.08.2022, all relating to the same cause of action. The petitioner also sought a direction for conclusion of the inquiry proceedings.
The petitioner stated that he had consistently appeared before the authorities during the investigation. According to him, the services provided by his proprietorship concern to SHKM Government Medical College were believed to be exempt from GST.
The respondents submitted that the petitioner had provided services to SHKM Government Medical College as well as two hospital-cum-medical colleges in Haryana. Statements of officials from the concerned colleges were recorded under Section 70 of the Act on 29.09.2020. According to the respondents, the petitioner’s firm had not charged GST on the services rendered, leading to an objection. They further contended that repeated summons had to be issued due to lack of response and that, although the petitioner subsequently started charging GST and raised demands on the two colleges, he failed to furnish complete details, making further investigation necessary.
The High Court noted that, during the proceedings, various directions had been issued requiring the petitioner to furnish documents and appear before the authorities. The petitioner had deposited ₹5 crore with the department under protest, appeared before the authorities on 28.02.2023, supplied documents, and thereafter continued to comply with directions, including appearing on 28.09.2023.
The Court held that the purpose of summoning the petitioner for the inquiry had already been fulfilled. It observed that the respondents possessed sufficient material, including records from the concerned government institutions and statements of their officials. The Court further held that the powers under Section 70 of the Act could not be used indefinitely to compel the petitioner’s repeated presence.
Accordingly, the writ petition was disposed of with liberty to the respondents to proceed in accordance with law, including issuing a show cause notice, if required, and to continue further proceedings based on the material already collected and the statements already recorded.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. The relief claimed in the present writ petition, filed under Article 226/227 of the Constitution of India is for quashing the purported inquiry proceedings initiated by the respondents under the provisions of the Central Goods & Services Tax Act, 2017 (for short, the ‘Act’).
2. The petitioner is aggrieved against the issuance of summons dated 23.06.2020, 10.08.2020, 08.12.2021, 21.12.2021, 22.03.2022, 28.04.2022, 20.05.2022 and 02.08.2022 (Annexures P-3, P-7 to P-11 & P-13) issued under Section 70 of the Act on the same cause of action. Prayer has thus been made to conclude the inquiry proceedings. The case of the petitioner is that he has been consistently appearing before the respondents in pursuance of the investigation being conducted on account of the fact that he was providing services to the SHKM Government Medical College and according to his knowledge and belief it was exempted from the provisions of GST.
3. The stand of the respondents is that the services were being provided to the said colleges and also to two hospital-cum-Medical Colleges namely M/s Bhagat Phool Singh Government Medical College, Khanpur Kalan Sonipat and Shaheed Hasan Khan Mewat Government Medical College, Nuh in Haryana. It has been mentioned that the statements of the officials of the concerned colleges were recorded on 29.09.2020 under Section 70 of the Act and the proprietorship of the petitioner’s firm namely M/s Believe Solution Services had not charged the GST on the service provided and there was an objection raised as such. It is their case that on account of no response from the petitioner, summons dated 28.04.2022, 06.05.2022 & 20.05.2022 were issued. It is further their case that the firm of the petitioner thereafter started charging GST and raised their demand from the two colleges subsequently and it was not submitting proper details and therefore, investigation was required.
4. Various directions have been issued earlier while noting that petitioner had deposited Rs.5 crores with the department under protest and that he had appeared on 28.02.2023 and given the details of the documents. Vide order dated 09.03.2023, it was further ordered that petitioner would give all necessary documents within a period of 15 days and will appear before the competent authority as and when called for. Thereafter also, directions were issued to appear vide orders dated 28.07.2023 and 05.09.2023. Mr.Goel also concedes that on 28.09.2023, the petitioner had already put in appearance.
5. We are thus of the considered opinion that the purpose of summoning the petitioner for the enquiry apparently stands satisfied. It is for the respondents to proceed thereafter, in accordance with law in their wisdom if they still feel that further proceedings are to be initiated by issuance of a show cause notice. The provisions of Section 70 of the Act cannot be continued to be used for the purpose of enforcing the presence for all times to come. As noticed, the service is being provided to two Government institutions and there is sufficient record available with the respondents from the said offices. In the peculiar facts and circumstances, we feel that no useful purpose would be served to call the petitioner in pursuance of the summons issued under Section 70 of the Act hereafter.
6. Resultantly, in view of the above discussion, we dispose of the present writ petition with the above said observations, giving liberty to the respondents to proceed in accordance with law regarding issuance of show cause notice if so required and to proceed further in pursuance to the material which they have already gathered and the statements of the officials which they have already recorded.
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