Understanding Summons Under GST Law: Key Provisions of Section 70 of the CGST Act

A summons generally refers to an official request or command for an individual's presence. Under the Central Goods and Services Tax (CGST) Act of 2017, Section 70 empowers an officer to issue a summons. This enables them to compel individuals to appear and provide documented evidence concerning particular matters.

Recent Legislative Changes

As of July 23, 2024, the Union Budget proposed an amendment to Section 70, introducing sub-section 1A. This new provision would permit an authorized representative to appear on behalf of a summoned person, subject to notification by the CBIC (Central Board of Indirect Taxes and Customs).

What is a GST Summons?

Proceedings initiated under Goods and Services Tax (GST) legislation often commence with a summons. Section 70 of the CGST Act 2017 grants officers the authority to issue these summonses, compelling individuals to appear. This authority is typically invoked when an officer requires a person to present documentary evidence or to record a statement as part of an ongoing investigation. Individuals who receive a summons are legally obligated to comply and appear before the officer. The officer may summon anyone deemed necessary for the inquiry.

Consequences of Non-Compliance with a Summons

Summons proceedings carry the same legal weight as judicial proceedings. Consequently, failure to comply with a summons can lead to prosecution under various sections of the Indian Penal Code. This includes situations such as:

• Failure to appear on the designated date without valid justification.
• Presenting inaccurate or false evidence.
• Attempting to evade the summons.
• Not providing requested electronic records or documents.
• Disregarding multiple summonses.

Furthermore, Section 122(3)(d) of the CGST Act stipulates a monetary penalty of Rs. 25,000 for individuals who fail to appear after receiving a summons or neglect to provide requested documentary evidence. If a person refuses to provide a statement to the officer, the summoning officer must report this to their superior, and such cases may be escalated to a Magistrate.

Verifying the Validity of a Received GST Summons

When a GST summons is received, certain details must be present to ensure its validity:

• Document Identification Number (DIN): A DIN is mandatory and must be included on any GST summons issued for investigative purposes. A summons lacking a DIN may have its validity challenged.
• Language and Tone: The summons should be written in polite language, avoiding any tone that could be perceived as harassing towards the taxpayer.
• Justification: The document should clearly articulate the reasons for its issuance.
• Format Compliance: The summons must adhere to the officially prescribed format.

CBIC Instructions and Circulars Regarding Summons (2022)

The Central Board of Indirect Taxes and Customs (CBIC) has issued guidelines for issuing summons, referencing Circular No. 122/41/2019-GST from November 5, 2019. These instructions stipulate:

• Approval Requirement: Superintendents are authorized to issue summons only after securing prior written approval from an officer ranked Deputy or Assistant Commissioner or higher. A written justification for issuing the summons must also be recorded.
• Emergency Approvals: If written permission is not immediately feasible, oral or telephonic approval may be obtained. This must be formally documented and communicated to the authorizing officer as soon as possible.
• Record Keeping: The GST officer issuing the summons must maintain a dedicated file documenting the attendance or non-attendance of the summoned party. A copy of any recorded statement must also be kept within these records.
• Identification of Parties: Summons should name the alleged offender(s) to inform the recipient of their role (e.g., accused, co-accused, or witness). However, names can be omitted if disclosure would hinder the investigation.

Taxpayer Rights and Responsibilities During Summons Proceedings

Taxpayers must understand their rights and duties upon receiving a GST summons to safeguard themselves from potential undue actions by GST officials. CBIC regulations governing summons proceedings emphasize that summons should generally be issued to senior management only when a taxpayer is uncooperative. Appearances should be scheduled during reasonable times, typically regular business hours.

Key rights for taxpayers include:

• Right to Retract: If a taxpayer feels pressured or intimidated into providing inaccurate information, they have the right to withdraw their previous statement and submit a revised, accurate version.
• Right to Remain Silent: Taxpayers possess the constitutional right to remain silent if they are unsure about how to answer a specific question posed by an officer.
• Right to Cross-Examine: Should GST officers present adverse statements from third parties to influence the summoned taxpayer, the taxpayer has the right to cross-examine those third parties regarding the veracity of their statements.
• Right to Reference Documents: While providing a statement to a GST officer, taxpayers are permitted to consult their books of accounts or any other relevant documents to ensure the accuracy of their submissions.

It is the taxpayer's duty to provide information to the GST officer truthfully and to the best of their knowledge. Submitting misleading or false statements is unacceptable. It is crucial for taxpayers to recognize the legal implications of their statements, as the Supreme Court has ruled that statements made to GST officers are admissible as evidence in court, given that GST officers are not categorized as police officers.