the essay of 21 February 2018 · the untouched capture
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>February 21, 2018</strong></font></p>
<p align="center"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>Summons in GST</strong></font><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> <u>By Vijay Kumar</u></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>per Section 70 of the CGST Act and SGST Acts, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>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. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(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. </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 108 of the Customs Act reads as: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>SECTION 108 </em></strong><em>. <strong>Power to summon persons to give evidence and produce documents. </strong>–(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. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(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. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(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: </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em> <strong>Provided </strong>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. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(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). </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 14 of the Central Excise Act, which was applicable to Service Tax also read as: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Section 14. Power to summon persons to give evidence and produce documents in inquiries under this Act. - </em></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(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. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) All persons so su</font></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>mmoned 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: </em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>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. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(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).</em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us try a comparison of the provisions under these statutes -</font></p>
<div align="justify">
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr bordercolor="#000000" bgcolor="#008A00">
<td valign="top"> </td>
<td valign="top"><p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p></td>
<td valign="top"><p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Excise/Service Tax </strong></font></p></td>
<td valign="top"><p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GST </strong></font></p></td>
</tr>
<tr bordercolor="#000000">
<td valign="top" bgcolor="#008A00"><p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Who can summon? </strong></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Any Gazetted Officer of customs </em></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Any Central Excise Officer duly empowered by the Central Government </em></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The proper officer </em></font></p></td>
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<tr bordercolor="#000000">
<td valign="top" bgcolor="#008A00"><p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Who can be summoned? </strong></font></p></td>
<td valign="top" bgcolor="#D2F7D5"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>any person whose attendance he (the officer) considers necessary </em></font></p></td>
<td valign="top" bgcolor="#D2F7D5"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>any person whose attendance he (the officer) considers necessary </em></font></p></td>
<td valign="top" bgcolor="#D2F7D5"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>any person whose attendance he considers necessary </em></font></p></td>
</tr>
<tr bordercolor="#000000">
<td valign="top" bgcolor="#008A00"><p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>For what? </strong></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>either to give evidence or to produce a document or any other thing <font color="#FF0000">in any inquiry which such officer is making under this Act </font></em></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>either to give evidence or to produce a document or any other thing <font color="#FF0000">in any inquiry which such officer is making for any of the purposes of this Act.</font> </em></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>either to give evidence or to produce a document or any other thing <font color="#FF0000">in any inquiry </font></em></font></p></td>
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<td valign="top" bgcolor="#008A00"><p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Duties and Obligations of the person summoned </strong></font></p></td>
<td valign="top" bgcolor="#D2F7D5"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>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: </em></font></p></td>
<td valign="top" bgcolor="#D2F7D5"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>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: </em></font></p></td>
<td valign="top" bgcolor="#D2F7D5"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">----- </font></p></td>
</tr>
<tr bordercolor="#000000">
<td valign="top" bgcolor="#008A00"><p><font color="#FFFFFF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Yes, Your Honour! </strong></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Every such inquiry as aforesaid shall be deemed to be a <font color="#FF0000">judicial proceeding</font> within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 </em></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Every such inquiry as aforesaid shall be deemed to be a <font color="#FF0000">"judicial proceeding"</font> within the meaning of Section 193 and Section 228 of the Indian Penal Code, 1860 </em></font></p></td>
<td valign="top" bgcolor="#D3E9BE"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Every such inquiry referred to in sub-section (1) shall be deemed to be a <font color="#FF0000">"judicial proceedings" </font>within the meaning of section 193 and section 228 of the Indian Penal Code </em></font></p></td>
</tr>
</table>
</div>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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 - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <em><font color="#FF0000">in any inquiry which such officer is making under this Act – for Customs </font></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <em><font color="#FF0000">in any inquiry which such officer is making for any of the purposes of this Act. </font></em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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 <em>in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908. </em>Mind you, it is not <em>mutatis-mutandis, </em>but <em>same manner </em>. Under ORDER V of the CPC, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <em>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: </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Should a suit be instituted to issue summons under GST? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(2) A defendant to whom a summons has been issued under sub-rule (1) may appear - </em></font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(a) in person, or </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) by a pleader duly instructed and able to answer all material questions relating to the suit, or </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) by a pleader accompanied by some person able to answer all such questions.</font></em></p>
</blockquote>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will they allow a lawyer to represent the summoned person? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bound to attend </strong>: Why is it that the GST Law does not contain a provision that <em>All persons so summoned shall be bound to attend </em>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, " <em>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 </em>." So, if you don't honour the summons, you are liable to a penalty which may <em>extend </em> to 25,000 rupees. It is not clear as to who will decide the <em>extent </em> of the penalty. <font color="#FF6600">Can you choose between attending and paying penalty? </font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Indian Penal Code, Section 175 stipulates that: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>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</em>;</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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 <em>193 and section 228 of the Indian Penal Code </em>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 <em>"judicial proceedings". </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Don't worry, you need not say, <em>"your honour" </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 193 only says, <em>"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;" </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And Section 228 stipulates, <em>"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."</em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the GST Officer is similar to a Civil Court in his power to summon and his inquiry is deemed to be <em>"judicial proceedings" </em>only for false evidence and intentional insult. Otherwise he is jest a powerful officer, just like any other babu. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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 <strong>you </strong> to ask <strong>you </strong> questions, not to answer <strong>your </strong> questions and unfortunately, <strong>you </strong> have no powers to summon them. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">More on summons next week.</font></p>
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