February 21, 2018

By Vijay Kumar

AS per Section 70 of the CGST Act and SGST Acts,

70. (1) The proper officer under this Act shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908.

(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a "judicial proceedings" within the meaning of section 193 and section 228 of the Indian Penal Code.

Section 108 of the Customs Act reads as:

SECTION 108 . Power to summon persons to give evidence and produce documents. –(1) Any Gazetted Officer of customs shall have power to summon any person 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 under this Act.

(2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.

(3) All persons so summoned shall be bound to attend either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents and other things as may be required:

Provided that the exemption under section 132 of the Code of Civil Procedure, 1908 (5 of 1908), shall be applicable to any requisition for attendance under this section.

(4) Every such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860).

Section 14 of the Central Excise Act, which was applicable to Service Tax also read as:

Section 14. Power to summon persons to give evidence and produce documents in inquiries under this Act. -

(1) Any Central Excise Officer duly empowered by the Central Government in this behalf, shall have power to summon any person 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. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.

(2) All persons so summoned shall be bound to attend, either in person or by an authorised agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and to produce such documents and other things as may be required:

Provided that the exemptions under Sections 132 and 133 of the Code of Civil Procedure, 1908 (5 of 1908) shall be applicable to requisitions for attendance under this Section.

(3) Every such inquiry as aforesaid shall be deemed to be a "judicial proceeding" within the meaning of Section 193 and Section 228 of the Indian Penal Code, 1860 (45 of 1860).

Let us try a comparison of the provisions under these statutes -

It is not too long before the summons machinery in the GST regime will be put to use. The machinery is already there – it only needs a few nuts and bolts and a little lubrication. How is the GST summons different from the present Customs one or the just retired Excise and Service Tax summons?

For starters, like in the old regime, the Superintendent is the proper officer to issue summons and this means all the officers of and above the rank of Superintendent are ‘empowered' to issue summons.

Pray, for what? Summons were issued routinely, regularly, some called it purposelessly, unaccountably and usually to harass and subdue, but there had to be a purpose at least on paper and that used to be -

1. in any inquiry which such officer is making under this Act – for Customs

2. in any inquiry which such officer is making for any of the purposes of this Act.

So, for Customs, it was any inquiry and for Excise and Service Tax, it was any inquiry for any of the purposes of the Act and what was the difference?

Now under GST, it is any inquiry, that means the GST officer can summon anyone for any inquiry. But there is a speed breaker. Under GST, the power to summon is in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908. Mind you, it is not mutatis-mutandis, but same manner . Under ORDER V of the CPC,

1. Summons - (1) When a suit has been duly instituted a summons may be issued to the defendant to appear and answer the claim on a day to be therein specified:

Should a suit be instituted to issue summons under GST?

(2) A defendant to whom a summons has been issued under sub-rule (1) may appear -

(a) in person, or

(b) by a pleader duly instructed and able to answer all material questions relating to the suit, or

(c) by a pleader accompanied by some person able to answer all such questions.

Will they allow a lawyer to represent the summoned person?

Bound to attend : Why is it that the GST Law does not contain a provision that All persons so summoned shall be bound to attend as provided for in Customs and Excise? Is the person summoned under GST not bound to attend? Not exactly! As per Section 122(3)(d) of the GST Act, " Any person who–– fails to appear before the officer of central tax, when issued with a summon for appearance to give evidence or produce a document in an inquiry; shall be liable to a penalty which may extend to twenty-five thousand rupees ." So, if you don't honour the summons, you are liable to a penalty which may extend to 25,000 rupees. It is not clear as to who will decide the extent of the penalty. Can you choose between attending and paying penalty?

The Indian Penal Code, Section 175 stipulates that:

Omission to produce document to public servant by person legally bound to produce it.- Whoever, being legally bound to produce or deliver up any document or electronic record to any public servant, as such, intentionally omits so to produce or deliver up the same, shall be punished with simple imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both;

Is Section 175 applicable to the summons under GST, especially when there is a provision Section 122(3)(d) in the GST Act? Will this specific provision eclipse the general provision? And in any case Section 175 of the IPC is not mentioned in Section 70 of the GST Act where two other sections 193 and section 228 of the Indian Penal Code are specifically and threateningly mentioned. These two IPC sections will invariably be mentioned in the summons to be issued by the GST officers to perhaps intimidate the summoned persons and to remind them that the inquiry is "judicial proceedings".

Don't worry, you need not say, "your honour"

Section 193 only says, "Whoever intentionally gives false evidence in any of a judicial proceeding, or fabricates false evidence for the purpose of being used in any stage of a judicial proceeding, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine;"

And Section 228 stipulates, "Whoever intentionally offers any insult, or causes any interruption to any public servant, while such public servant is sitting in any stage of a judicial proceeding, shall be punished with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both."

So, the GST Officer is similar to a Civil Court in his power to summon and his inquiry is deemed to be "judicial proceedings" only for false evidence and intentional insult. Otherwise he is jest a powerful officer, just like any other babu.

The other day, an angry Managing Director of a Company came to see me and he was furious that the tax officer was insisting on his presence even though his manager had explained everything and furnished all the required documents. "Why should they want the MD to appear; what more information can I give; Why did they keep quiet all these years? Is it not harassment?", he said that he was going to ask all these questions when he appeared before the officer. I told him, "they have summoned you to ask you questions, not to answer your questions and unfortunately, you have no powers to summon them.

More on summons next week.