A division bench of Rajasthan High Court comprising Chief Justice Akil Kureshi and Justice Sameer Jain while dealing with a petition challenging vires of section 70 of Rajasthan GST Act, 2017, dismissed the same which provides for Power to summon persons to give evidence and produce documents.
Background
The petitioner challenged the vires of Section 70 of the Rajasthan Goods and Service Tax Act, 2017. The petitioner had also challenged the summons dated 16.05.2021 issued by respondent No.1 in the exercise of powers under Section 70 of the RGST Act.
Submissions made
Learned counsel for the petitioner drew attention to Section 70 of the said Act and contended that the powers are vested in the State authority to issue summons and require the attendance of a person in relation to the inquiry in which the person issuing the summons is himself interested. Such powers can be exercised like the civil court under the Code of Civil Procedure. He submitted that this scheme of Section 70 is in violation of the principle of separation of powers. For this, he placed reliance on the case of Madras Bar Association Vs. Union of India reported in (2010) 11 SCC 1.
Counsel submitted that respondent No.1 has issued the summons without indicating the nature of inquiry being conducted against the petitioner, without giving details of inquiry pending against the petitioner, and giving unreasonably short time of merely 12 hours to appear before him in the city different from where the petitioner resides.
Observation of the Court
The court was of the view that it may maintain a clear distinction between a case of the provision vesting powers in an authority which provision is bad in law and exercise of the powers which is improper or not in consonance with the vested powers. At the first instance, it considered the petitioner’s challenge to the constitutionality of Section 70 of the CGST Act. As is well known, merging several taxing statutes the Central, as well as State legislatures, have framed GST laws.
Like other taxing statutes these Acts also have charging provisions, machinery provisions as well as provisions for tax collection, and provisions for arresting tax evasions. Chapter XIV contained in the RGST Act pertains to inspection, search, seizure, and arrest. Section 67 contained in the said chapter gives the power of inspection and search and seizure to the proper officer not below the rank of joint Commissioner who under certain circumstances can exercise such powers. Section 68 pertains to the inspection of goods in movement. Section 69 vests power of arrest.
Section 70 contained in the said chapter which is under challenge pertains to Power to summon persons to give evidence and produce documents which state that,
The proper officer under this Act shall have the 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 (Central Act No. 5 of 1908). (2) Every such inquiry referred to in subsection (1) shall be deemed to be a “judicial proceedings” within the meaning of section 193 and section 228 of the Indian Penal Code.
As per sub-Section (1) of Section 70 the proper officer would have the power to summon any person whose attendance is considered necessary either to give evidence or to produce documents or any other thing in any enquiry in the same manner, as provided in the case of a civil court under Civil Procedure Code. Sub-section (2) of Section 70 provides that any such enquiry referred to sub-section (1) shall be deemed to be judicial proceedings within the meaning of Section 193 and Section 228 of the Indian Penal Code.
The provision thus while empowering the proper officer to summon a person to give evidence or to produce documents, controls such exercise of powers by providing that the summons may be issued where a proper officer considers it necessary that such person is required to give evidence or to produce certain documents. These powers were not thus unguided or unanalyzed. Further, such powers were to be exercised in the same manner as would be exercisable by a civil court under the Code of Civil Procedure. Order 5 of the Code of Civil Procedure pertains to the issue and service of summons under the C.P.C. This order makes detailed provisions for issuance and service of summons.
The powers under sub-Section (1) of Section 70 thus would be exercisable in the manner provided therein. In order to ensure that the information that a person so summoned provides, carries a certain sanctity, Sub-section (2) of Section 70 provides that every such enquiry under sub-Section (1) would be deemed to be a judicial proceeding within the meaning of Section 193 and 228 of IPC.
Furthermore, Court ruled that,
“We do not find such powers are in any manner beyond the competence of legislature or opposed to any of the fundamental rights or other provisions of the Constitution of India. We may also recall that Section 14C of the Central Excise Act and Section 108 of the Customs Act contain similar provisions authorizing the appropriate officer with the power to summon attendance of a witness for recording statements or for production of documents. The vires of the said section must be upheld. The reference to the decision of the Supreme Court in the case of the Madras Bar Association (supra) is of no relevance. It was the case in which in the context of the constitution of various tribunals, the Supreme Court has discussed at length the various principles governing the independence of judiciary and requirement of ensuring that such tribunals function independently.”
With respect to the issue of summoning the Court opined that,
“Coming to the challenge to summon itself we notice that in the summons the authority has indicated the documents which the petitioner must carry with him while appearing before the said authority. If the summons in a particular case grants unreasonably short time which in any case is impossible for the notice to comply with, it is always open for the aggrieved person to seek an extension from the authority or to make a shelter of the court proceedings. However only on this ground, we are not inclined to interfere since summons was issued way back on 16.12.2021 and would have worked itself out.”
Case Details
Case Title: M/s S.k. Metal v. Assistant Commissioner, B II Enforcement Wing II, Department Of Commercial Taxes
Bench: Chief Justice Akil Kureshi and Justice Sameer
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