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Summons can be defined as a legal document which is served upon a person directing to appear to answer the claims surfaced against him. The step of issuing of summons is of great importance and the following cannot be dispensed with, as it sets an official dialogue between the relevant authorities and the defendant. This gives defendant an opportunity to provide a plausible explanation to settle the suspicions of the relevant authorities thereby, it also becomes the part of principles of natural justice. Summons under the Central Goods and Service Tax Act, 2017 [Hereinafter mentioned as The CGST Act] are issued under section 70 [Power of Summons] so as to allow the suspect to tender oral evidences and to produce relevant documents. This article is a small effort in order to bring out the legal implications of the provisions related to summons under the CGST Act.

ANALYSIS OF SECTION 70

(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 a civil court under the provisions of the Code of Civil Procedure, 1908.

(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a “judicial proceeding” within the meaning of section 193 and section 228 of the Indian Penal Code.

‘Proper Officer’ – The term proper officer has been defined in Section 2(91) of The CGST Act, where it defines it as: –

“Means the Commissioner or the officer of the central tax who is assigned that function by the Commissioner in the Board.”

Superintendent of Central Tax [Vide Entry 4 of Circular 3/3/2017 dated 05.07.2017.], Senior Intelligence Officer, GST Intelligence or Superintendent [vide entry 8 of Not 14/2017 Central Tax dated 01.07.2017.] were held to be proper officers for the purpose of section 70 of The CGST Act by the notifications issued by CBIC [ Central Board of Indirect Taxes & Customs]. The general rule provides for strict interpretation of revenue statutes as a basic norm thereby, we can construe that the use of word ‘the’ before the word proper officer of the court enunciates the intention of legislators to keep the power of summoning confined to the use of the ‘proper officer’ only. It gives meaning that it is the specific officer who has been assigned jurisdiction either on the basis of territory, function or category, has the authority to issue summon under the said section. 

‘Any Person’- The word ‘Any person’ is added by the legislators to provide a wider ambit to the powers of summoning, where the basis of summoning has been given direction by using the words ‘which he considers necessary’. Further, the section also enunciates that the summons shall be issued in the same manner as provided in the Code of Civil Procedure, 1908 thereby, the provisions of The Code relating to summons are to be read into the following sections. This means that the power of summoning is subjected to the limitations provided by the Code through provisions like section 27 which leaves the power of summoning is left confined to the defendant and Order 5 Rule 4 which provides for territorial limitations while issuing summons for personal appearance.

Summon And Statement Under GST Act, 2017

‘Objective of summoning’- The objective of summoning as can be construed from the section is to tender oral evidences, to produce any document or any other thing which the officers might think to be relevant to the inquiry. Under an ideal regime the power of summoning should be used as a dialogue between the authorities and defendant. Where the defendant is to explain the transactions which are in question and the officers to extract the information which is to be useful in further investigation. The whole proceeding should be within the constitutional spheres.

 ‘Inquiry’- The nature of inquiry is provided in sub-section (2) of the provision which through a legal fiction makes the inquiry a judicial proceeding for specific applicability of Section 193 which relates to the offence of giving false evidence during a judicial proceeding and Section 228 which relates to the offence of causing insults or interruptions to any public servant.

WHAT STATEMENTS GIVEN DURING THE INQUIRY ARE TO BE RELEVANT

Section 136 of the CGST Act provides for the Relevancy of statement made by the defendant during the inquiry being conducted in pursuance of the summons issued as follows: –

A statement made and signed by a person on appearance in response to any summons issued under section 70 during the course of any inquiry or proceedings under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, ––

(a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or

(b) when the person who made the statement is examined as a witness in the case before the court and the court is of the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice.

A. Nature of Statement

The statements made by the accused during the course of investigation is often looked at with suspicion by the court as the possibility of the accused being hesitant and intimidated cannot be ruled out this makes the statement of a non-confessional nature and the evidentiary value of such statements of a weak character, the following principle flows from Article 22(3) of the Constitution of India which provides for right against self-incrimination. The officers should resort to the extraction of information which becomes the basis of subsequent discovery which can then become a substantive evidence [M/S Ambika International Vs Union of India & Anr. (2016-TIOL-1238)].

B. Exceptional Circumstances

The provision is akin to Section 9D of The Central Excise Act, 1944. The statement is to be used in accordance to section 136(a) when the circumstances are created where the statements of accused cannot be recorded again. Thereby, the procedural requirements enunciated section 136(a) are to be satisfied in order to make the statement relevant [C.C.E. V Parmarth Iron Pvt Ltd, 2010 (250) ELT 514 (All)].

The statement under Section 136(b) to be relevant when the witness has already been examined before the court and circumstances call for the court to make the statement given by the witness during the course of investigation of the proceeding should be admissible. [M/s Jindal Drugs Pvt Ltd and Another Vs Union of India and Another, (2016-TIOL-1230)].

C. Application of Mind

In case of Hi-Tech Abrasives Ltd vs CCE [TAXC 54/2017] The High Court of Chhattisgarh held that; –

 “For a statement to be treated ‘relevant’ and ‘admissible’ under the law ‘mere recording’ of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to be admitted in the interest of justice.”

The judicial pronouncements and the interpretation of the relevant provisions puts the onus on the officers issuing summons to show application of mind [Ankit Bindal Vs Pr. Commissioner of Central Goods and Services Tax Delhi North, (W.P.(C) 3968/2021)].

D. Right to cross-examination

In case of J&K Cigarettes Ltd. & Ors. Vs. Collector of Central Excise & Ors [WP (c) No. 1854 of 1992] The constitutional validity of section 9D of the Central Excise Act was upheld by the court holding it pari materia with section 32 of the Indian Evidence Act, 1872, However, the court also held that the following section should be used in exceptional circumstances as the following provisions are an extension of doctrine of necessity. Further, the court enunciated that the onus to prove the existence of circumstances which compels the authorities to use the given statement is on them. The statements made to the authorities during the course of investigation will not be ipso facto admissible, the conditions of admissibility are to be fulfilled.

The court also affirmed the contentions of the petitioner in the same case that the right of cross examination stems out of the principles of natural justice and should not be dispensed with. There can be situations where the person who was available after issuing of summons for the purpose of tendering evidence to the officers may not be available at the time of cross examination but in such case the officers should provide accused an opportunity to employ his means to make cross examination possible. Say for instance the cross examination cannot be summoned because the witness cannot be summoned without incurring unreasonable expense then it can be the prerogative of the accused to borne the cost to procure attendance of the witness for cross examination.

In court has reiterated and expounded upon the right of the accused to cross examine the following statement in Basudev Garg Vs. Commissioner of Customs [2013 (294) ELT 353] and Sampad Narayan Mukherjee v. Union of India & Ors [W.P. No.25447 (W) of 2018]. 

LIMITATIONS TO THE INQUIRY CONDUCTED IN PURSUANCE OF SECTION 70

 A. No Intimidation and Physical Violence

In case of Agarwal Foundries Ltd Rama Towers Vs. Union of India [Writ Petition No.28268 of 2019], the court enunciated that no CGST officer should indulge in the activities of intimidating the person summoned and strictly frowned upon the acts of physical violence being conducted by such officers. The Court reiterate that: –

“Merely because the authorities under the CGST Act, 2017 are not to be treated as police officials, they cannot claim any immunity if they indulge in acts of physical violence against persons, they suspect of being guilty of tax evasion.”

The court emphasised that the duty of the officers is to strike balance between the liberty of the accused and the investigation process.

B. Interrogation for prolonged and abrupt hours

The petitioners in the given case also challenged the inquiry being conducted at very abrupt hours where the respondent opposed by relying on the provisions of the CGST Act and contending that the provisions do not provide any embargo of time in which inquiry is to be conducted. The Court affirmed the view of the petitioner by relying on the case of D.K. Basu, Ashok Johri Vs. State of West Bengal [Writ Petition No.28268 of 2019] and held that: –

 That even a prolonged interrogation by an investigative agency may take the colour of deprivation of personal liberty.”

The court did not find the interrogation till 12:30 a.m. to be a routine thing and deprecated the authorities to conduct interrogation for prolonged and untimely hours. The court concluded by holding that: – 

 “The respondents cannot contend that they will interrogate the persons suspected of committing any tax evasion as per their sweet will forcibly keeping them in their custody for indefinite period.” 

CONCLUSION

The officers have a wide power of summoning and interrogating according to the law under CGST Act but the rule of prudence provides for such powers to be used with greater circumspection. 

“Compelling the witness will get the authorities the version of story they want to make their case but co-operation of the witness will get the authorities the version of the story the need to make their case.”

The right to choose the version of explanation for answering the allegations surfaced against the accused forms the very basis of an adversarial proceeding, Thereby, the authorities should ensure voluntariness on part of the accused whilst giving evidences.

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