What does Section 70 Say?
Section 70 of the CGST ACT 2017 empowers the Proper Officer(PO) to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing as required in an inquiry.
Now let us understand the word Summon
The Word summon means the presence of a person or an appearance of a person.
Can Summon be issued directly?
The answer to the question is that firstly inquiry needs to be initiated for the issuance of any summons. The summon enables the Proper officer to call upon for the submission of evidence or any document or any other thing for the purpose of GST case.
The summon shall include the matter relating to the inquiry initiated otherwise it may be treated as invalid.
Section 70 itself explains that summon is required to collect material evidence or any document or any other thing for the purpose of framing a case by the Proper Officer.
The Proper Officer has to determine the Tax Liability, Interest and Penalty before framing any case or initiating any proceedings against the Taxable Person. For Example Sections 73 and 74 talk about the issuance of statements for taxes short paid or unpaid, any refund erroneously taken or Input tax credit wrongly availed or utilized.
Basic Condition before issuance of any summon by officer:
- The Proper officer has to obtain the necessary permission from the higher authority such as Deputy Commissioner or Assistant Commissioner.
- The Proper Officer has to maintain a record of attendance or non-attendance of the recipients of summons.
- The name of the Offender/Offender needs to be mentioned in the summon issued so that the recipient can know what he is being summoned in, whether accused or co-accused or as a witness. The name may be excluded where it can affect the investigation process.
Whether a person has to attend if any summons is issued?
The answer to the above-said question is Yes where a summon is issued to any person they have to attend as it is a judicial proceeding and where anyone fails to attend then a penalty shall be levied. The Summon where demands any personal appearance then the taxpayer has to attend in a personal capacity, not through a representative (Suresh Balkrishna Jajra vs Union of India)
Whether any legal remedy is available when a person is unable to comply with summon?
The answer is affirmative if any person could not comply with the summon due to the unreasonable short time period provided in summon then such person can seek an extension or shelter of the court (SK Metal vs Assistant Commissioner, Jaipur).
- Right of Retraction: Taxpayers can retract the incorrect statement with the correct statement if any given which safeguards adverse action being initiated against the Taxpayer.
- Right to Remain Silent: Taxpayers can remain silent where they do not know any answer as its being their constitutional right and will not be considered as an obstruction of proceedings as affirmed by various court judgements.
- Right to cross-examine: Taxpayers can cross-examine the statement if any made by a third person against them.
Some Judicial Pronouncements
- Taxpayer cannot be compelled to pay any amount of tax during the investigation or inquiry (Clear trip Private Limited and Ors, Bombay HC).
- Balance of Convenience cant be titled in favour of taxpayers to be allowed to appear through video conferencing (P.V. RAO vs Senior Intelligence Officer, DGGI & ORS).
- High Courts should not interfere at the summons stage except in exceptional cases (Commissionerate of Customs Calcutta Vs M.M. Exports 2007).
- Multiple Authorities may issue summons (G.K. Trading Company vs Union of India).
- Directing Party to stop payment of Taxpayer through summon is beyond jurisdiction (SRI SAI BALAJI ASSOCIATES vs State of Andhra Pradesh, AP HC).
- Inquiry U/s 70 has not been prohibited under section 6(2)(b) of the CGST ACT 2017 ( Gliders Traders Private Limited vs State of Uttar Pradesh).
Author's View: The above said article contains author viewpoint only for more clarification please refer to the respective sections and rules framed under GST.
Tags income tax