Summons under GST

CA Roopa Nayak , Last updated: 19 August 2022
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Background

Summons are being issued by dept officers to assessees under GST regime. Section 70 grants powers to the Proper Officer to summon any person to present himself [or along with the documents] 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 for any of the purposes of this Act. The summons could also contain list of documents, such as financials, copies of agreements, invoices which is required to be provided by the tax payerpertaining to one or more financial years.

Persons to whom summons are issued shall be bound to attend, either in person or by an authorised agent in case the tax payer is not natural person. The person summoned could only seek postponement of summons due to genuine reasons, unavoidable causes such as illness, being out of country or personal issues. When the person is unable to attend on the fixed date and time then he has to intimateto official mail id of concerned officer/ RPAD letter giving reason why not able to attend and request to fix a fresh date with advance intimation. Information available may also be sent noting down what is sent in the same extension letter.

There has been instruction No.03/2022-23 issued 17th August 2022 which has given guidelines on issuance of summons.

In this background the paper writer has examined summons provisions under GST, as well as important aspects to be taken care by assessee while attending summons.

Features of Summons under GST

The summons is a judicial proceeding, which cannot be ignored.
Officers of the rank of Superintendent and above are empowered to issue summons.
The summons should state the purpose of inquiry. It should not be vague.
The person summoned has to attend and state the truth upon the matter being examined.
The person attending summons has to state the truth upon any question raised.
When the information sought is not known to the summoned person, then clearly should mention that the information is not known. Alternately if time is required to get the information sought, then ask for time. This would ensure no erroneous statements are made which could be used against the assessee if subsequently SCN is issued.
The person is bound to submit all the relevant documents asked for. If not available state the reasonable time required to provide the same.
The statement is admissible as evidence and can be used against the person in legal proceedings.
Statement should be voluntarily given and not under threat coercion or even worse dictation.
The person should be summoned and statement taken during working hours. As per Board Circular No. 65/88, dated 6-9-1988 issued under CE by CBEC, persons summoned should not be interrogated at odd hours.

Key points in the Latest Instruction no.03/2022-23(GST-Investigation)

Officers are advised to explore instances when instead of resorting to summons, a letter for requisition of information may suffice.

Guidelines as under

Summons to be issued by Superintendent after obtaining written permission from officer not below rank of Deputy/Asst Commissioner with reasons for issuance to be recorded in writing.
Where not possible to get prior written permission, oral/telephonic permission be obtained and intimating in writing to said officer at earliest opportunity.
Officer issuing summons to record reasons in file about appearance/non appearance of summoned person and keep statement copy in file.
Avoid summons to call the statutory documents available in GST portal.
Senior management officials such as CMD/MD/CEO/CFO/similar officers of any company or PSU generally not be issued summons. They be summoned when there are indications that they are involved in decision making process which led to loss of revenue.
Summoning officer be present at time date for which summons issued. If not then inform summoned person in advance writing or orally.
Issuance of repeated summons without service of summons must be avoided.

Paper writer Comments

At this juncture we could recollect that the Board vide Circular in F. No. 208/122/89-CX. 6, dated 13-10-1989 has asked the officers to exercise restraint when summoning top management staff of Companies. Summons to managing directors, directors and senior officers must be done only when assessees are not co-operating and this facility should not be used to harass management.

Also in Circular No. F. No. 207/07/2014-CX-6, dated 20.01.2015 under erstwhile excise law emphasized senior management cannot be summoned unless they are involved in decision leading to loss of revenue. Similarly clarified in FAQ's issued by CBEC- under head summons under GST.

Some additional aspects which maybe relevant and were clarified in earlier FAQ's of CBIC-GST) (2nd Edition - 31st March, 2017)Summons under GST as under:

Extracts

Q30. What are the guidelines for issue of summons?

i. Summons are to be issued as a last resort where assesses are not co-operating and this section should not be used for the top management;

ii. The language of the summons should not be harsh and legal which causes unnecessary mental stress and embarrassment to the receiver;…..

Q31. What are the precautions to be observed while issuing summons?

Ans. The following precautions should generally be observed when summoning a person:

(i) A summon should not be issued for appearance where it is not justified. The power to summon can be exercised only when there is an inquiry being undertaken and the attendance of the person is considered necessary.

(ii) Normally, summons should not be issued repeatedly. As far as practicable, the statement of the accused or witness should be recorded in minimum number of appearances.

(iii) Respect the time of appearance given in the summons. No person should be made to wait for long hours before his statement is recorded except when it has been decided very consciously as a matter of strategy.

(iv) Preferably, statements should be recorded during office hours; however, an exception could be made regarding time and place of recording statement having regard to the facts in the case.

Also held in FSM Education Pvt Ltd (Writ Petition (L) NO.30974 of 2021)the assessee can be summoned only as a last resort and as far as practicable, details can be obtained from an assessee by way of an ordinary letter. The summons cannot be issued to coerce and pressurize the assessee.

In case of non-cooperation from the assessee in submitting the requisite documents/data, then the summons can be issued indicating the purpose of issuing summons to the Petitioner with reasonable days of notice (i.e. 7 days) before fixing the date for recording the statement.

Aspects to be taken care of by tax payerswhile attending summons

The person summoned could take note bookand go to meet the officer.
He could ask politely before statement is taken whether he could note all the questions and answers in the notebook.
Ensure that before signing on recorded statement, the person asks to allow to read statement before signing it. Confirm that it is factually correct and all favourable aspects are covered and only then sign it.
Do not commit for any tax payment in summons which is also against the procedure to follow of due process of law.
The person being summoned has the right to ask a copy of the statement being recorded.
Ask for copy of statement, before signing it.
He should read fully and ensure it matches with his own statement which he has recorded in his notes taken during summons.
Refresh memory by going through the points noted in notebook, if available, is allowed.
Later keep statement copy for future documentation.
If copy of signed statement was asked but not provided, then soon after coming out, he should write down all the questions and answers when fresh in his mind. Especially those questions and answers which were not recorded.
He could immediately send in writing an account of questions asked and replies given by RPAD letter, while making very clear in letter that though requested copy of statement was not provided.
The statement is legally binding once given unless it is retracted or additional information provided immediately thereafter. If there are any discrepancies in statement vis a vis what was said then on a priority retract statement given within next 24 hours.
Send across by RPAD letter in detail the deposition proceedings including questions asked and answers given, while making clear that the earlier statement was incorrectly recorded in the statement.
Sometimes the statement could be taken under extreme pressure, such as summoning person at 11 am, but statement being recorded after hours of questioning. Threats of arrest , closure of business are also unfortunate practices which are used by some errant officers.
In case of such unacceptable behavior, the person could seek permission and leave. Immediately send acknowledged letter conveying circumstances when he has left and asking to fix alternate date and time for summons.
If the concerned employee unaware of facts, he can suggest the employee who is familiar with the facts and summons will be issued accordingly
Summons may be issued to particular person even in course of investigation launched against some other person
Further revenue authorities can neither issue any advices regarding payment of tax nor coerce the tax payer to pay the tax without determining the certain liability in any proceeding of enquiry. Recovery in the stage of investigation/summons proceedings is wholly arbitrary and without jurisdiction.Similarly held in Deem Distributors Private Limited (2022 (56) GSTL 286 (Telangana).