The Central Good and Services Tax Act of 2017 grants powers to officers appointed under the Act to make specific enquiries, call for documents or a thing or demand the presence of any person. Section 70 of the Goods and Services Act or GST of 2017 lays down the law applicable to issuing summons to initiate an enquiry under the Goods and Services Act. The GST law has imbibed many of the attributes associated with its parent laws, like service tax, Value Added Tax or VAT, and excise duty, among others. The process pertaining to adjudication has been borrowed from the previous laws. Summons form an integral part of the adjudication process under any law, including the GST Act. Scroll down to check more information regarding Summons under GST Act.
Summons Under GST Act – Brief
Summons pertains to the procedure using which an officer demands or calls upon the attendance or presence of any taxpayer or any other person. The very first step of every enquiry, under any law, commences with the issuance of summons. The provisions pertaining to summons under the law with respect to GST are provided for under Section 70 of the GST Act of 2017.
Section 70 of the GST Act of 2017 states that the officer empowered by the Act shall be granted the power to summon the presence of any person for the purpose of providing evidence and submitting documents for the purpose of the inquiry. Such an officer shall be vested with the powers of a civil court as is provided under the provisions of the code of Civil Procedure of 1908. The proceedings conducted by such an officer shall have the effect of judicial proceedings. They shall be considered so for the purposes of various provisions of the Indian Penal Code of 1860. Guidelines in relation to the issuance of summons were released in August 2022 to provide detailed instructions on how to issue summons and conduct proceedings thereafter. Pursuant to Section 70 of the GST Act of 2017 and the guidelines, proper officers empowered under the law shall have the power to summon any person whose attendance she considers necessary to obtain evidence order document any other thing for an enquiry in the same manner as a civil court pursuant to the provisions of the Code of Civil Procedure of 1908.
Before the enactment of the GST Act, the summoning authority was first required to inform senior authorities and then approach the civil court to execute summons against any taxpayer. However, post the enactment of the GST Act, the summoning authority is no longer required to approach the civil court for the execution of summons in situations where taxpayers deliberately disobey any summons issued. Issuing summons is an essential tool which is used by the department to obtain statements or documents or information from any person with the purpose of looking deep into tax evasions. However, the process of issuing summons must be done judiciously, along with due consideration. Moreover, restraint and caution should be exercised not to use this provision frivolously. It should only be used as a last resort with due justification in cases where there is a deliberate defiance in responding accordingly to the summons under GST. It should only be used as a shield, not as a weapon of attack to curb the freedom of the taxpayer should only be used to protect the law of the land. Summons can be issued to give evidence through statements given on oath or production of accounts, books, documents, or other things. However, summons can only be issued in case of pendency of an enquiry being conducted duly under the law.
What shall a Summon Include? – Summons under GST
A summons for enquiry under the GST shall include the following details:
- The Document Identification Number or DIN must be generated and mentioned on the GST summons that has been issued for the purpose of investigation. The validity of the summons shall come into question in case the DIN is not present on the summons under GST.
- The language which has been used in the summons must be civil and must not be such that it amounts to harassment of the taxpayer.
- The summons must be prepared in a manner which justifies the reason for which it is being issued.
The 2022 circular and instructions pertaining to the summons, which has been issued by the Central Board for Indirect Taxes or CBIC, contain the following details:
- The superintendents can issue summons only after taking prior approval through written permission from the officer. The rank of the officer shall not be below the assistant commissioner or deputy commissioner rank. There should also be a written record mentioning why a particular summons is being issued.
- Where written permission in advance, as mentioned above, cannot be obtained, an oral permission or telephonic permission may be obtained, which shall later be converted into the written form. It is imperative that this is intimated to the summoning officer compulsorily as soon as possible.
- The GST Officer who is in charge of issuing summons is required to maintain a file to record the fact of appearance or non-appearance of the person on whom summons have been issued. This file must mandatorily form part of the records. Moreover, a copy of the statement of the recipient of the summons, if any, must also be placed in the records additionally.
- The summons must clearly include the details of the offenders so that the recipient of the summons can gauge whether she is being summoned as an accused, a co-accused or witness or any other capacity in which she is being summoned. However, the name of the accused may be excluded in cases where such inclusion can have detrimental effects on the process of investigation.
- In cases where the summons has yet to be serviced, the summoning officer is required to refrain from repeatedly issuing summons and is advised to issue up to three summons at regular intervals. However, there is no restriction under the law on the upper limit of the number of times a summons can be issued.
Non-Compliance of Summons under GST
Proceedings conducted by proper officers in the exercise of powers in relation to the issuance of summons are considered a judicial proceedings. Failure to respond to the summons in accordance with the mandate on it can attract prosecution under various provisions of the Indian Penal Code of 1860 for either failing to appear on the date, time and venue specified on the summons without any reasonable justification or providing false evidence or the person is found to be absconding to avoid the receipt of summons or the recipient fails to produce any documents or electronic records as provided in the summons or fails to appear even after summons have been issued repeatedly.
Non-Compliance with the summons under GST, which has duly been issued by an authority empowered under the law, is an offence under the Indian Penal Code of 1860 under Sections 174 of Section 175. As per Section 174 of the IPC, every person who is legally bound to appear but does not do so commits an offence under the section. Punishment includes imprisonment, which can extend up to one month or a fine which may extend up to ₹500 or both. Section 175 of the IPC states that when the person is weekly bound to produce documents to do so shall be punished with imprisonment, which shall extend up to one month, or a fine which may extend up to ₹500 or with both. Suppose a taxpayer intentionally provides false evidence or fabricates such evidence with the intention of using it during any stage of the enquiry process while responding to the summons which has been issued under section 70 of the GST Act of 2017. In that case, he shall be deemed to have committed an offence under the Indian Penal Code. He shall be punished with imprisonment, which can extend up to seven years, and shall also be liable for a fine as provided under Section 193 of the Indian Penal Code.
In addition to the aforementioned, a monetary penalty shall also be imposed on the person on for whom the summons was issued under Section 122 (3) (d) of the GST Act for failing to appear after the summons has been issued or failing to provide documentary evidence Despite summons being issued. The penalty will amount to ₹25,000. Moreover, suppose the person refuses to make a statement before the summoning officer as required. In that case, the summoning officer is duty-bound to inform her superior officer, who shall intimate the same to a magistrate.
Hence, it is advisable to duly respond and appear before the summoning officer at the designated time and place when a summons under GST law has been issued. This holds true for every person, regardless of the fact that they are registered under the GST law or not. As mentioned above, failure to do can lead to penalties under the GST Act in addition to prosecution under various provisions of the Indian Penal Code of 1860, which can lead to additional fines or imprisonment or both.
Actions on Receiving a GST Summons
Summons is generally the starting point for any inquiry or investigation, and one is required to attend to the summons received with due care to avoid legal complications in the future. Once a summons is obtained from appropriate officers under the GST law, the person is required to present themselves before the summoning officer on the proper date and time, which has been specified in the summons, along with required information and supporting documents, if any. Failure to act in accordance with the summons will attract a penalty and may also attract prosecution as mentioned above. An exception is granted to women who do not traditionally appear in public and to some other privileged persons as provided under section 132 section 133 code of Civil Procedure of 1908. Such people are not required to appear when the summons is issued.
Checklist to ensure the validity of the Summons under GST
On receiving a summons issued by a GST officer, the recipient must check whether the summons contains a computer generated DIN or document identification number. The language of the summons should be civil and must mention the reason for which it is being issued. It must be in accordance with and in the format as is provided in the instructions released by CBIC in 2022.
The following checklist must be kept in mind when a summons has been received:
- Ensure that the summons has been in the written format as mandated by the authorities and with reasons for the issuance.
- The name of the offender is clearly mentioned on the summons in a manner that allows the recipient to understand the context for which the summons is being issued for and the capacity in which the recipient is being summoned, namely, whether as a witness or an accused or a co-accused.
- Summons cannot be issued if all the required statutory documents have already been uploaded on the GST portal online.
- Summoning officers cannot issue summons to any of the senior management of the companies, like the CEP or CFO or CMD or MD, unless investigations clearly indicate that the aforementioned have been directly involved in any of the decision making processes that may have caused the contravention for which summons under the GST law is being issued.
Rights and Duties of the Taxpayer
Taxpayers have certain rights and duties provided for under the GST law, and it is imperative for them to be aware of the same, especially in situations where they receive Assam means under the GST law. Such awareness shall ensure that they remain protected from unwanted actions and abuse of power from certain officials. The CBIC clearly mandated that summons must be issued only when the taxpayer is clearly not being cooperative. The summons for appearance must mention reasonable hours for appearance before the summoning officer.
Below mentioned are certain rights which every taxpayer has under the GST law:
- Right to Remain Silent
The right to remain silent is the right granted by the constitution of India, and it applies to the proceedings under GST law as well. Suppose a taxpayer is under the impression that answering a question may lead to incrimination or is uncertain about the answer. In that case, she shall be well within her rights if she chooses to remain silent.
- The Right of Retraction
It is often seen that the GST officers have the tendency to intimidate and pressurise taxpayers, which often leads the latter to provide inaccurate information in the form of statements that are recorded. In such situations, the taxpayer shall have the right to retract an earlier made statement and submit a fresh statement to provide an accurate response as required by the GST officials.
- Right to Cross-Examine
There can be instances where the GST officials may attempt to use adverse statements which have been made by 3rd parties against the taxpayer. In such situations, the taxpayer shall have the right to cross examine such 3rd parties regarding the statements made by them affecting his interests for the purpose of checking the validity of such statements.
- Right to refer to relevant documents.
When the taxpayer makes any statement to a GST officer, the taxpayer has the right to refer to relevant documents like the book of accounts for the purpose of providing an accurate and complete statement that shall go on record. The taxpayer is required to provide to the GST officer the required information to the best of her knowledge, as misleading or incorrect statements may lead to penalty or attract prosecution under the Indian Penal Code of 1860. The Supreme Court of India has held that statements made to a GST officer shall amount to evidence under the Indian Evidence Act of 1872 and shall be admissible as such. Moreover, since GST officers are not considered police officers, any statements made to them shall not be hit by the embargo, which is attached to statements which are made to police officers. Hence, statements made to them shall qualify as evidence.
Summons pertains to the procedure using which an officer demands or calls upon the attendance or presence of any taxpayer or any other person. The very first step of every enquiry, under any law, commences with the issuance of summons. The provisions pertaining to summons under the law with respect to GST are provided for under Section 70 of the GST Act of 2017. It is prudent to duly respond and appear before the summoning officer at the designated time and place when a summons under GST law has been issued. Failure to do can lead to penalties under the GST Act in addition to prosecution under various provisions of the Indian Penal Code of 1860, which can lead to additional fines or imprisonment or both.
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