Section 70 of the Central Goods and Services Tax (CGST) Act, 2017 empowers “proper officers” designated under the Act to summon any person for the purpose of:

• Giving evidence: This includes recording statements, answering questions, and providing any relevant information related to an inquiry.
• Producing documents or any other thing: This could involve submitting financial records, contracts, invoices, or any other material deemed necessary for the investigation.

Key points to remember:

• Who can be summoned: The officer can summon any person, regardless of their connection to the taxpayer or the specific matter under investigation. This could include customers, suppliers, employees, accountants, or even third-party witnesses.
• Manner of summoning: The summons must be issued in the same manner as provided for civil courts under the Code of Civil Procedure, 1908. This typically involves serving a written notice specifying the date, time, and place of appearance, along with details of the required evidence or documents.
• Compliance: It is mandatory for the summoned person to attend and comply with the officer’s orders. Failure to do so without reasonable justification can result in penalties or even imprisonment.
• Purpose of inquiry: The inquiry referred to in Section 70 can be initiated for various reasons, including verifying tax filings, investigating potential tax evasion, or gathering information for assessment purposes.
• Judicial proceedings: Every such inquiry under Section 70 is considered a “judicial proceeding” for the purposes of Sections 193 and 228 of the Indian Penal Code (IPC). This means that making false statements or presenting forged documents during the inquiry can attract penal consequences.

EXAMPLE

Who can be summoned?

• Any person whose attendance is considered necessary by the proper officer. This can include individuals, companies, and other entities.
• The person being summoned could be someone directly involved in the investigation, such as a taxpayer, supplier, or customer. They could also be someone with relevant information, even if not directly involved.

What can be summoned?

• Documents and records related to the investigation. This could include financial records, invoices, contracts, emails, and other relevant materials.
• The person them self to give evidence orally. This could involve answering questions about their knowledge or involvement in the matter under investigation.

How are summons issued?

• Summons are issued in writing by the proper officer and must follow the format and procedures outlined in the Code of Civil Procedure, 1908.
• The summons should clearly state the reason for summoning the person, the date and time they are required to appear, and any documents they are required to produce.

What happens if someone fails to comply with a summons?

• If a person fails to comply with a summons without a reasonable excuse, they may be subject to penalties. These can include fines and, in some cases, imprisonment.

FAQ QUESTIONS

Who can issue a summons under Section 70?

• Only a “proper officer” as defined in the Act can issue a summons. This typically includes officers like Superintendents, Assistant Commissioners, and Deputy Commissioners.

Who can be summoned?

• Any person whose attendance is considered necessary for an inquiry. This includes individuals, companies, and other entities.

What can be summoned for?

• Two purposes:
  • Giving evidence: Sharing information related to the inquiry.
  • Producing documents: Presenting relevant documents, records, or other things.

How is a summons issued?

• The officer serves a written notice specifying the date, time, and place for appearance, along with details about the required evidence or documents.

Do I have to comply with a summons?

• Yes, generally it is mandatory to comply with a valid summons. Non-compliance can lead to penalties and prosecution.

What are my rights when summoned?

• You have the right to be represented by a lawyer or authorized representative.
• You can refuse to answer questions that may incriminate you.
• You can request reasonable time and place for complying with the summons.

When can I challenge a summons?

• You can challenge a summons if it is issued without proper authority, for irrelevant purposes, or violates your legal rights. You can consult a lawyer for guidance on challenging a summons.

CASE LAWS

• K. Trading Company v. Union of India clarified that “inquiry” refers to a specific investigation, not general statutory steps. It cannot be used for pre-inquiry stages or post-inquiry actions.
• National Building Construction Company Ltd. v. Union of India held that the scope of “inquiry” is broad and not restricted to specific purposes mentioned in the Act.

Who can be Summoned:

• Section 70 empowers officers to summon any person, not just registered taxable persons. This includes individuals, companies, and other entities potentially relevant to the investigation.

Purpose of Summoning:

• The officer must consider the person’s attendance necessary for either giving evidence or producing documents/things needed for the inquiry.
• K. Metal v. Union of India stressed that summoning shouldn’t be routine or used to obtain readily available information like GSTR filings.

Procedure for Summoning:

• Summons must be issued in the same manner as provided in the Code of Civil Procedure, 1908.
• This includes proper format, service procedures, and timelines for compliance.

Consequences of Non-Compliance:

• Failure to comply with a valid summons without reasonable cause can lead to penalties and prosecution under the Act.

Additional Points:

• M/s. S.R. Enterprises v. Union of India emphasized that the inquiry must be conducted fairly and in accordance with natural justice principles.
• M/s. Rajesh Exports v. Union of India highlighted the importance of recording statements and proceedings related to the inquiry.

Resources:

• INSTRUCTION No. 03/2022-23 (GST-Investigation)by CBIC provides guidelines on issuing summons under Section 70.
• Taxmann’s “Summon for Attendance and Production of Documents | A Comprehensive Guide”offers an in-depth analysis of relevant case laws.

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