SUBJECT: GUIDELINES ON ISSUANCE OF SUMMONS UNDER SECTION 70 OF THE GUJARAT GOODS & SERVICES TAX ACT, 2017
AND
GUIDELINES FOR ARREST AND BAIL IN RELATION TO OFFENCES PUNISHABLE UNDER THE GUJARAT GOODS & SERVICES TAX ACT, 2017
The guidelines on issuance of summons under section 70 and the guidelines for arrest/bail in relation to offences punishable under the GUJARAT GOODS & SERVICES TAX ACT, 2017 have been formulated and attached herewith along with Annexure-1 & Annexure-2.
These instructions/guidelines may be brought to the notice of all the field offices/formations under their charge for strict compliance. Non-observance of the instructions/ guidelines will be viewed seriously. Difficulties, if any, in implementation of the aforesaid instructions may be brought to the notice of this office.
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(Milind Torawane)
Chief Commissioner of State Tax
Gujarat State, Ahmedabad
(A) GUIDELINES ON ISSUANCE OF SUMMONS UNDER SECTION 70 OF THE GUJARAT GOODS & SERVICES TAX ACT, 2017
(i) Power to issue summons are generally exercised by Assistant Commissioners and State Tax Officers, though higher officers may also issue summons. Summons by Assistant Commissioners and State Tax Officers should be issued after obtaining prior written permission from an officer not below the rank of Joint Commissioner with the reasons for issuance of summons to be recorded in writing.
(ii) Where for operational reasons it is not possible to obtain such prior written permission, oral/ telephonic permission from such officer must be obtained and the same should be reduced to writing and intimated to the officer according such permission at the earliest opportunity.
(iii) In all cases, where summons are issued, the officer issuing summons should record in file about appearance/non-appearance of the summoned person and place a copy of statement recorded in file.
(iv) Issuance of summons may be avoided to call upon statutory documents which are digitally/online available in the GST portal.
(v) Senior management officials such as CMD/ MD/ CEO/ CFO/ similar officers of any company or a PSU should not generally be issued summons in the first instance. They should be summoned when there are clear indications in the investigation of their involvement in the decision making process which led to loss of revenue.
(vi) The summoning officer must be present at the time and date for which summons is issued. In case of any exigency, the summoned person must be informed in advance in writing or orally.
(vii) All persons summoned are bound to appear before the officers concerned, the only exception being women who do not by tradition appear in public or privileged persons. The exemption so available to these persons under Section 132 and 133 of CPC, may be kept in consideration while investigating the case.
(viii) Issuance of repeated summons without ensuring service of the summons must be avoided.
Sometimes it may so happen that summoned person does not join investigations even after being repeatedly summoned. In such cases, after giving reasonable opportunity, generally three summons at reasonable intervals, a complaint should be filed with the jurisdictional magistrate alleging that the accused has committed offence under Sections 172 of Indian Penal Code (absconding to avoid service of summons or other proceedings) and/or 174 of Indian Penal Code (non-attendance in obedience to an order from public servant), as inquiry under Section 70 of Gujarat Goods and Service Tax Act, 2017 has been deemed to be a "judicial proceedings" within the meaning of Section 193 and Section 228 of the Indian Penal Code. Before filing such complaints, it must be ensured that summons have adequately been served upon the intended person in accordance with Section 169 of the Gujarat Goods and Service Tax Act, 2017. However, this does not bar to issue further summons to the said person under Section 70 of the Act.
(ix) When a person appears before the summoning officer in view of the summons issued by the proper officer, statement(s) may be recorded u/s 70 of Gujarat Goods and Service Tax Act, 2017.
During the course of investigation, if the competent authority is of the opinion to arrest such person, the person should be arrested as soon as possible and further interrogation/inquiry should be carried out in accordance with law after executing arrest.
(B) GUIDELINES FOR ARREST AND BAIL IN RELATION TO OFFENCES PUNISHABLE UNDER THE GUJARAT GOODS & SERVICES TAX ACT, 2017
1. Conditions precedent to arrest:
1.1 Sub-section (1) of Section 132 of GUJARAT GOODS AND SERVICE TAX ACT, 2017 Act, 2017 deals with the punishment for offences specified therein. Sub-section (1) of Section 69 gives the power to the Commissioner to arrest a person where he has reason to believe that the alleged offender has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub section (1) of Section 132 which is punishable under clause (i) or clause (ii) of sub section (1), or sub-section (2) of the Section 132 of GUJARAT GOODS AND SERVICE TAX ACT, 2017. Therefore, before placing a person under arrest, the legal requirements must be fulfilled. The reasons to believe to arrive at a decision to place an alleged offender under arrest must be unambiguous and amply clear. The reasons to believe must be based on credible material.
1.2 Since arrest impinges on the personal liberty of an individual, the power to arrest must be exercised carefully. The arrest should not be made in routine and mechanical manner. Even if all the legal conditions precedent to arrest mentioned in Section 132 of the GUJARAT GOODS AND SERVICE TAX ACT, 2017 are fulfilled, that will not, ipso facto, mean that an arrest must be made. Once the legal ingredients of the offence are made out, the competent authority must then determine if the answer to any or some of the following questions is in the affirmative:
1.2.1 Whether the person was concerned in the non-bailable offence or credible information has been received, or a reasonable suspicion exists, of his having been so concerned?
1.2.2 Whether arrest is necessary to ensure proper investigation of the offence?
1.2.3 Whether the person, if not restricted, is likely to tamper the course of further investigation or is likely to tamper with evidence or intimidate or influence witnesses?
1.2.4 Whether person is mastermind or key operator effecting proxy/benami transaction in the name of dummy GSTIN or non-existent persons, etc. for passing fraudulent input tax credit etc.? or whether person is associated in any manner with a person who is master mind or key operator?
1.2.5 . Whether person has committed or caused to commit the offence as mentioned u/s 132(1 )(c) of GUJARAT GOODS AND SERVICE TAX ACT, 2017?
1.3 Arrest should not be resorted to in cases of technical nature i.e. where the demand of tax is based on a difference of opinion regarding interpretation of Law. Factors like whether offender is cooperating in the investigation, compliance to summons, furnishing of documents called for, not giving evasive replies, voluntary payment of Tax, penalty , interest and fine in full etc. inter alia, may be kept in mind while forming the opinion to arrest a person by competent authority.
2. Procedure for arrest
2.1 The competent authority shall record on file that after considering the nature of offence, the role of person involved and evidence available, he has reason to believe that the person has committed an offence as mentioned in Section 132 and may authorize an officer of State tax to arrest the concerned person(s). Relevant provisions of the Code of Criminal Procedure, 1973 (2 of 1974) read with section 69(3) of GUJARAT GOODS AND SERVICE TAX ACT, 2017 Act relating to arrest and the procedure thereof, must be adhered to. It is, therefore, advised that the competent authority should ensure that all officers are fully familiar with the relevant provisions of the Code of Criminal Procedure, 1973 (2 of 1974).
2.2 The arrest memo must be in compliance with the directions of Hon'ble Supreme Court in the case of D.K Basu vs State of West Bengal reported in 1997(1) SCC 416 (see paragraph 35). The arrest memo should indicate relevant section (s) of the GUJARAT GOODS AND SERVICE TAX ACT, 2017 Act, 2017 or other laws attracted to the case and to the arrested person. In addition,
2.2.1 The grounds of arrest must be explained to the arrested person and this fact must be noted in the arrest memo;
2.2.2 A nominated or authorized person (as per the details provided by arrested person) of the arrested person should be informed immediately and this fact shall be mentioned in the arrest memo;
2.2.3 The date and time of arrest shall be mentioned in the arrest memo and the arrest memo should be given to the person arrested under proper acknowledgment.
2.3 A separate arrest memo has to be made and provided to each individual/ arrested person. This should particularly be kept in mind in the event when there are several arrests in a single case.
2.4 Further there are certain modalities which should be complied with at the time of arrest and pursuant to an arrest, which include the following:
2.4.1 A woman should be arrested only by a woman officer in accordance with section 46 of Code Criminal Procedure, 1973.
2.4.2 Medical examination arrested person should be conducted by a medical officer in the service of Central or state Government and in case the medical officer is not available, by a registered medical practitioner, soon after the arrest is made. If an arrested person is a female, then such an examination shall be made only by or under supervision of a female medical officer, and in case the female medical officer is not available, by a female registered medical practitioner.
2.4.3 It shall the duty of the person having the custody of an arrested person to take reasonable care of the health and safety of the arrested person.
2.4.4 Arrest should be made with minimal use of force and publicity, and without violence. The person arrested should be subjected to reasonable restraint to prevent escape.
3. Post arrest formalities:
3.1 The procedure is separately outlined for the different categories of offences, as listed in subsection (4) and (5) of section 132 of the GUJARAT GOODS AND SERVICE TAX ACT, 2017 as amended:
3.1.1 In cases, where person is arrested under sub-section (1) of section 69 of the GUJARAT GOODS AND SERVICE TAX ACT, 2017 for an offence specified under sub-section (4) of section 132 the GUJARAT GOODS AND SERVICE TAX ACT, 2017, Deputy Commissioner is bound to release person on bail against bail bond. The bail conditions should be informed in writing to the arrested person and also on telephone to the nominated person of the person(s) arrested. The arrested person should be allowed to talk to the nominated person.
3.1.2 The conditions will relate to, inter alia, execution of a personal bail bond and one surety of like amount given by a local person of repute, appearance before the investigating officer when required and not leaving the country without informing the officer. The amount to be indicated in the personal bail bond and surety will depend upon the facts and circumstances of each case, inter-alia, on the amount of tax involved. It has to be ensured that the amount of Bail bond/Surety should not be excessive and should be commensurate with the financial status of the arrested person.
3.1.3 If the conditions of the bail are fulfilled by the arrested person, he shall be released by the officer concerned on bail forthwith. However, only in cases where the conditions for granting bail are not fulfilled, the arrested person shall be produced before the appropriate Magistrate without unnecessary delay and within twenty-four hours of arrest. If necessary, the arrested person may be handed over to the nearest police station for his safe custody, during the night under a challan, before he is produced before the Court.
3.1.4 In cases, where a person is arrested under sub-section (1) of Section 69 of the GUJARAT GOODS AND SERVICE TAX ACT, 2017 for an offence specified under sub section (5) of Section 132 of the GUJARAT GOODS AND SERVICE TAX ACT, 2017 the officer authorized to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty-four hours.
3.2 After arrest of the accused, efforts should be made to file prosecution complaint under Section 132 of the Act, before the competent court at the earliest, preferably within sixty days of arrest, where no bail is granted. In all other cases of arrest also, prosecution complaint should be filed within a definite time frame.
4. Reports to be sent
The Additional Commissioner I Joint Commissioner shall send a report on every arrest to the Chief Commissioner of State Tax as well as to the Special Commissioner of Sate Tax within 24 hours of the arrest giving details as has been prescribed in Annexure- 1. To maintain record of arrests made by State Tax Department, from 10th September, 2022 onwards, a monthly report of all persons arrested in the State shall be prepared and maintained by the Additional Commissioner (Enforcement) in the format, hereby prescribed in Annexure- 2.
Gujarat State, Ahmedabad (for)
ANNEXURE: 1
(INSTRUCTION No.01/2022-23 (GST-Enforcement)
From: The Additional Commissioner/Joint Commissioner,
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To,
The Chief Commissioner of
State Tax Gujarat
IndiaiyOthers (If others, specify)
ANNEXURE: 2
Monthly Report Register on person(s) Arrested in the State