ISSUANCE OF SUMMONS UNDER GST

[Dr. Sanjiv Agarwal]

Section 70 of CGST Act, 2017 empowers the proper officer under the GST Act in the process of making any enquiry and to give evidence or to produce a document or any other thing.

Meaning of ‘summon’ and its purpose

Advanced Law Lexicon has compiled the following meaning of ‘summons’:

Summon. To call upon. [S.62(2), CrPC, 1973 (2 of 1974); Art. 85(1), Const.].

The ordinary meaning of the word 'summon' is to demand presence of; call upon a person to appear. The power that is conferred is to require a person to appear. S. l71-A(I)  confers power on the Customs Officer to summon a person. LAXMAN PADMA BHAGAL AND ORS. VERSUS THE STATE - 1964 (12) TMI 44 - BOMBAY HIGH COURT [Sea  Customs Act (8 of 1878), S. 171-A]

Summoning. To call (by a summons). [So 135, Army Act (46  of 1950)].

Summons. A "summons" is a process issued from the office of a Court of Justice requiring the persons to whom it is addressed to attend the Court for the purpose therein stated.

An authoritative call to attend a specified place for a specified purpose; a writ by which a person is called to appear before a Court, judicial officer etc. [Ss. 172, 173 and 174, !PC (45 of 1860)].

"Summons" is the name of a writ, commanding the Sheriff, or other authorized officer, to notify the party to appear in Court to answer a complaint made against him and in writ  specified, on a day therein mentioned.

The word 'summons' in Article 164 of  the Constitution does not include notices that might be served on the defendant during subsequent stages of the suit. In cases where summons for the first hearing of the suit have already been duly served on the defendant subsequent non-service of summonses and notices cannot be brought within the purview of Art. 164 nor can a fresh start of limitation be claimed in such a case from the date of knowledge. SULTANUL ZAMAN VERSUS HAMID UDDIN AND ORS. - 1961 (9) TMI 106 - ALLAHABAD HIGH COURT [Limitation Act (9 of 1908), Art. 164]

The order fixing the date for filing written statement and for final hearing should be treated as summons. Srinath Agarwal v. Santosh Kumar, AIR 1981 All 400, 404. [CPC (5 of  1908) O. V, Rr. 1 to 8, U.P. Urban Buildings (Regulation of  Letting, Rent, Eviction) Act (13 of 1972), S. 20(4)].

The ordinary meaning of the word 'summon' is to demand presence of; call upon a person to appear. LAXMAN PADMA BHAGAL AND ORS. VERSUS THE STATE - 1964 (12) TMI 44 - BOMBAY HIGH COURT [Sea Customs Act (1878), S. 171A] .

The 'Summons' in Art. 164 means summons for the first  hearing. If that has been duly served the period will commence from the date of the decree regardless of the fact  whether the notice of transfer was duly served or not. AIR 1932 Lab 539 and AIR 1954 Punj 137, Rei. on. Ranglal v. Munjaji, MLJ : QD (1956-1960) Vol. III C2155 : ILR (1955) Hyd 734: AIR 1956 Hyd 29, para 3. [Limitation Act (9 of 1908), Art. 164].

The expression 'summons' appearing in Art. 164, refers to the  first summons issued in the case. AIR 1954 Punj 137, Foll.  Nem Chand v. Man Bhari, MLJ : QD (1956-1960) Vol. III  C2155 : 59 Punj LR 449. [Limitation Act (9 of 1908), Art. 164]

In case there is no interruption in the hearing of the suit and the suit proceeds in ordinary course, then the word 'summons' in Article 164 refers to the summons issued in the first instance. But if there is an interruption in the hearing and there is stay on account of the order of the superior Court the case assumes a different character. The first hearing in that instance is the first date on which the case again starts after the case is sent back from the High Court and the hearing is again resumed. And in such a case whenever a date is fixed for the hearing or a date is adjourned it is the bounden duty of the Court to inform parties or their counselor their representatives of such dates. If they are not so informed, the party not informed will not be bound by the proceedings. GOBARDHAN RAM BISHESHAR RAM VERSUS BANARSI RAM AND ORS. - 1957 (4) TMI 86 - ALLAHABAD HIGH COURT [Limitation Act (9 of 1908), Art. 164]

Summons are issued to enquire about evasion of tax or duty and contravention of statutory provisions. It does not specifically state that who is evader and against whom proceedings have to be initiated. It also does not mean that the noticee is an evader. It cannot be assumed or presumed that summon means action against the person to whom it is issued. If one reads the language employed, then one can have a presumption without any doubt that authorities have only issued summons intending to enquire into alleged evasion of tax or duty.

Summons can be used in an inquiry for recording statements or for collecting evidence/documents. While the evidentiary value of securing documentary and oral evidence under the said legal provision can hardly be over emphasized, nevertheless, it is desirable that summons need not always be issued when a simple letter, politely worded, can also serve the purpose of securing documents relevant to investigation.

The power to issue summon and examine a person has a vital bearing in an enquiry under the GST 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.

It may be noted that the “summon” under section 70 is for “any inquiry”. The Authorised Officer is not empowered under section 70 to retain the documents for which summon were issued. It has been held in TTV. DINAKARAN VERSUS ENFORCEMENT OFFICER, ENFORCEMENT DIRECTORATE [1995 (7) TMI 184 - MADRAS HIGH COURT] that where the summon did not mention the nature of investigation therein, it will still be valid since mentioning the details about investigation may alert the person concerned to manipulate his record.

Important points for Issuance of Summons under Section 70

Following points are important for summons under section 70 of CGST Act, 2017:

1. Summons can be issued by proper officer only.
2. Proper officer is empowered to summon any person – registered taxable person or any other person
3. Summon can be issued for :

• Seeking personal attendance
• To give evidence
• To produce a document
• To record a statement

4. Summon can be issued in relation to any enquiry
5. The manner of issuing summons shall be same as for a civil court under Code of Civil Procedure, 1908 (CPC)
6. Summon enquiries are deemed to be ‘judicial proceedings’ as per section 193 and 228 of Indian Penal Code, 1860. (IPC)

Apart from section 193 and 228 of Indian Penal Code, 1860, following provisions are also relevant in respect of summon enquiries:

(a)   Absconding to avoid service of summons or other proceeding (Section 172)

(b)  Non-attendance in obedience to an order from public servant (Section 179)

(c)   Omission to produce document or electronic record to public servant by person legally bound to produce it (Section 175)

Power to issue summons

According to section 70, where any officer has reasons to believe that any person is required in attendance to give evidence and produce documents, he may authorize any officer to issue summons. Any proper officer, duly authorized by the competent authority shall 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, which such officer is making.

Precautions to be observed while issuing summons

Under section 70(1), a summon may be issued for –

1. production of specified documents or other things (say, a contract or audit report)
2. production of all documents or things of a particular description (say, financial statements)

The condition is that such documents or things must be in the possession or control of the person to whom summon is being served.