TMI Blog2021 (2) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically petitioner No.2 under the provisions of the aforementioned statutes to give evidence and produce the relevant documents in inquiry. The power to summon persons to give evidence and produce documents in inquiry is a statutory function regulated by the aforementioned provisions of the statutes. Sub-sections (1) and (2) of Section 14 of the Central Excise Act state that summons to produce documents or other things in the possession of or under the control of the person summoned can be issued by an officer duly empowered by the Central Government and all persons so summoned shall be bound to attend and state the truth upon any subject respecting which they are examined or make statements or to produce such documents and other things as may be called upon. Sub-section (3) of section 14 states that every such inquiry as aforesaid shall be deemed to be a judicial proceedings within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 - On a thorough reading of the summons dated 12.10.2020 and 13.11.2020 it is clear that the summons have been issued to petitioner No.2 calling upon him to tender oral evidence and produce documents or things which have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorize the investigating officer to arrest petitioner No.2, but have been issued only for the purpose of completing the investigation into evasion of GST undertaken by respondent No.2. In this view of the matter, we do not see any reason for the petitioners / petitioner No.2 to apprehend arrest on presenting himself before the investigating officer in response to the summons which have been issued to the petitioners. The summons issued to the petitioners / petitioner No.2 on 12.10.2020 and 13.11.2020 are valid and no interference is called upon - it is directed that petitioner shall remain present before the concerned investigating officer / authority in the office of the Directorate General of GST Intelligence, Mumbai Zonal Unit, NTC House, 3rd Floor, N.M. Road, Ballad Estate, Mumbai - 400 001 on 1st March 2021 at 11:00 a.m. for the purpose of inquiry and thereafter as and when required. If the petitioners cooperate in the investigation, respondents shall not take any coercive steps against the petitioners - petition disposed off. - WRIT PETITION (L) NO.5000 OF 2020 WITH INTERIM APPLICATION (L) NO.9100 OF 2020 - - - Dated:- 16-2-2021 - UJJAL BHUYAN MILIND N. JADHAV, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gency, a financial creditor of petitioner No.1 invoked section 7 of the Insolvency and Bankruptcy Code, 2016 by filing application in the National Company Law Tribunal, Mumbai. ( NCLT in short). By order dated 23.09.2019 NCLT admitted the application of respondent No.3 and declared a moratorium in terms of section 14 of the said Code and appointed respondent No.5 i.e. Ms. Palak Swapnil Desai as Interim Resolution Professional ( IRP for short), further directing that the assests of petitioner No.1 should not be liquidated until the insolvency process was completed. 3.4. On 03.04.2019 respondent No.2 issued summons to petitioner No.2 i.e. Mr. Kunal Jiwarajka (Director) under the provisions of under section 83 of the Finance Act read with section 14 of the Central Excise Act read with section 174 of the CGST Act to tender oral evidence in relation to inquiry regarding evasion of service tax / GST being undertaken by respondent No.2. 3.5. On 15.4.2019 respondent No.2 issued a second summons to petitioner No.2 i.e. Mr. Kunal Jiwarajka (Director) under the said provisions to tender oral evidence in relation to inquiry about evasion of service tax / GST being undertaken by resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that petitioner No.2 expresses severe apprehension of arrest by the officers of respondent No.2 for interrogation and inquiry in respect of alleged evasion of service tax / GST and has therefore approached this Court seeking protection. He submitted that petitioners and more specifically petitioner No.2 is ready and willing to cooperate with the investigation and inquiry undertaken by respondent No.2. 4.1. He submitted that pursuant to the raid in the office of the petitioners, respondent No.2 has seized documents, hard disks, box files, flag files etc which find mention in the panchnama dated 03.04.2019 produced as Exhibit 'A' to the petition; therefore in order to cooperate with the investigation and inquiry it is necessary for respondent No.2 to make available to the petitioners the materials seized from his possession to enable the petitioners to produce the documents as sought for; respondent No.2 has refused to hand over any material or documents seized from the petitioners possession based on which the summons have been issued and this amounted to violation of the principles of natural justice; all that the petitioners are submitting that in order to participate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his involvement in circular trading; further statement of petitioner No.2 recorded on 04.03.2020 also admitted similar transactions so as to improve the balance sheet of petitioner No.1. He submitted that this modus operandi clearly showed that petitioners were involved in circular trading of the goods time and again amongst themselves by preparing purchase and sale invoices without actual movement / supply of goods; statements recorded admitting such trading activity namely for financial gain to petitioner No.1 in lieu of commissions by way of value additions in the products on the directions of the petitioner No.1 proved the involvement of petitioners. He submitted that such circular trading involved wrongful eligibility of Input Tax Credit ( ITC for short) to the parties on the basis of purchase and sale invoices as well as reversal of wrongfully availed ITC. 5.2. He submitted that petitioners have availed loan from 24 banks and financial institutions aggregating to ₹ 330.78 crores and have not disclosed the same as per details received from the IRP; petitioner No.1 has availed ineligible ITC on the strength of invoices issued fraudulently without receipt of goods and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned. (2) All persons so summoned shall be bound to attend, either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and to produce such documents and other things as may be required: Provided that the exemptions under sections 132 and 133 of the Code of Civil Procedure (5 of 1908) shall be applicable to requisitions for attendance under this section. (3) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). 8.2. Section 83 of the Finance Act, 1994 which is also relevant is extracted as under :- 83. Application of certain provisions of Act 1 of 1944.- The provisions of the following sections of the Central Excises and Salt Act, 1944, as in force from time to time, shall ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not continue as privilege if the said notification is rescinded on or after the appointed day; or (d) affect any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or (e) affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed; (f) affect any proceedings including that relating to an appeal, review or reference, instituted before on, or aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.10.2019 and 04.08.2020 under the provisions of section 83 of the Finance Act, 1994 read with section 14 of the Central Excise Act read with section 174 of the CGST Act and further 2 summons dated 12.10.2020 and 13.11.2020 under the provisions of section 70 of the CGST Act to the petitioners. Perusal of the summons issued to the petitioners show that the first 4 summons which were issued did not give any details with respect to the subject which the petitioners were required to give evidence or to produce documents or any other thing in the inquiry undertaken by respondent No.2. Summons dated 12.10.2020 for the first time calls upon the petitioners to attend and give evidence on the subject details mentioned in the summons; calling upon petitioner No.2 to give evidence and/or produce documents or things pertaining to the transport documents for the years 2017-18 and 2018-19, payment particulars to transporters for the above period and sample of sale / purchase invoices for all suppliers and customers from his possession. Summons dated 13.11.2020 called upon the petitioners to give evidence and produce documents and things which are stated in the summons dated 12.10.2020. 10.2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts or things of the following description in your possession or under you control: 1. Tender Evidence 2. Documents as per summons dated 12.10.2020 NOW, THEREFORE, in exercise of powers vested in me under Section 70 of the Central Goods and Service Tax Act, 2017 I do hereby summon you to appear before me in person on 2020-12-01 at 2:30 PM at the office of 1st floor, NTC House, Mumbai 400001 Inquiry as aforesaid is deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860) and non-compliance of this summon is an offence punishable under Section 174 175 of the Indian Penal Code, 1860. Given under my hand and seal of office to-day the 13 day of November, 2020 at Mumbai. Name : S.K. SINGH Signature : SD/- Designation Superintendent / Appraiser / Senior Intelligence Officer Seal of Office. 10.3. On a thorough reading of the summons dated 12.10.2020 and 13.11.2020 it is clear that the summons have been issued to petitioner No.2 calling upon him to tender oral evidence and produce documents or things which have been specified in the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied out at the premises of the petitioners on 03.04.2019 and seizure of the material and documents by the authority. It is therefore incumbent upon the petitioners to cooperate in the investigation / GST inquiry. The summons issued to the petitioners / petitioner No.2, does not authorize the investigating officer to arrest petitioner No.2, but have been issued only for the purpose of completing the investigation into evasion of GST undertaken by respondent No.2. In this view of the matter, we do not see any reason for the petitioners / petitioner No.2 to apprehend arrest on presenting himself before the investigating officer in response to the summons which have been issued to the petitioners. 11. We state that in view of the aforementioned legal position, the summons issued to the petitioners / petitioner No.2 on 12.10.2020 and 13.11.2020 are valid and no interference is called upon. 12. In that view of the matter, we therefore direct that petitionerNo.2 shall remain present before the concerned investigating officer / authority in the office of the Directorate General of GST Intelligence, Mumbai Zonal Unit, NTC House, 3rd Floor, N.M. Road, Ballad Estate, Mumbai - 400 001 on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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