Court Upholds Issuance of Summons Under CGST Act, 2017 As Part of Inquiry Process, Not the Initiation of Proceedings
The Delhi High Court, presided by Justice Neena Bansal Krishna, has dismissed the writ petitions filed by Md. Aniqul Islam and Akhtar Hussain against the Directorate of Goods and Services Tax Intelligence (DGGI). The petitions challenged the summons issued under Section 70 of the Central Goods and Services Tax Act, 2017 (CGST Act), arguing that they were issued with mala fide intent and violated procedural guidelines.
Md. Aniqul Islam, a small-scale bidi supplier in East Delhi, faced a search and seizure operation at his premises, leading to the confiscation of goods worth Rs. 7,22,500 by DGGI officers. The petitioner contended that the summons were improperly issued without a Document Identification Number (DIN) and violated established guidelines. Additionally, summons linked him to an unrelated entity, M/s Aarti Traders, which he claimed was baseless.
The court examined the nature of the summons under Section 70, noting that they are intended for gathering information or producing documents and do not constitute the initiation of statutory proceedings against the assessee. The judgment emphasized that such summons are part of an inquiry, distinct from proceedings under Sections 73 or 74 of the Act, which involve assessment or adjudication.
Justice Krishna highlighted previous rulings where the issuance of summons was deemed a step in the inquiry process, not equivalent to formal proceedings. The court referred to cases such as Armour Security India Limited v. Commissioner CGST Delhi East Commissionerate, where it was established that summons serve the purpose of eliciting information related to material discovered during searches.
The court also addressed concerns regarding potential arrests under Section 69, clarifying that the CGST Act provides inherent safeguards before any arrest is made. The commissioner must have reasons to believe an offence has been committed, and the grounds for arrest must be communicated to the individual.
In conclusion, the Delhi High Court dismissed the writ petitions, finding them premature, as the summons merely constituted part of an ongoing inquiry. The court advised the petitioners to seek redress at an appropriate stage, should proceedings be initiated following the inquiry.
The judgment reinforces the procedural role of summons under the CGST Act, ensuring they are not misinterpreted as punitive actions, but rather as mechanisms for information gathering within the framework of tax law enforcement.
Bottom Line:
Issuance of summons under Section 70 of the CGST Act, 2017 for inquiry purposes cannot be equated with the initiation of proceedings against the assessee. Such summons are intended for gathering information or producing documents and do not constitute the initiation of statutory proceedings.
Statutory provision(s):
- Central Goods and Services Tax Act, 2017, Sections 69, 70, 132
- Code of Civil Procedure, 1908
- Indian Penal Code, Sections 193, 228
