Rakesh Janghu vs. Union Of INDIA And Ors.

Facts

The petitioner, Rakesh Janghu, filed a writ petition seeking to quash inquiry proceedings initiated by the respondents under the Central Goods & Services Tax Act, 2017. The petitioner was aggrieved by multiple summons issued under Section 70 of the Act, related to services provided to SHKM Government Medical College, which he believed were GST-exempt. The respondents contended that the petitioner's firm, M/s Believe Solution Services, had not charged GST on services provided to government medical colleges, and later started charging GST and raising demands. The petitioner had previously deposited Rs. 5 crores under protest and appeared multiple times, providing documents and details. The court noted previous directions for the petitioner to cooperate and provide documents. The respondents conceded that the petitioner had appeared on 28.09.2023.

Held

The Court held that the purpose of summoning the petitioner for inquiry under Section 70 of the CGST Act had been satisfied. The repeated issuance of summons was deemed unnecessary, as the petitioner had consistently appeared, provided documents, and cooperated with the authorities. The Court reasoned that Section 70 of the Act cannot be perpetually used to enforce presence. Given that services were provided to government institutions and sufficient records were available with the respondents, further summoning of the petitioner would serve no useful purpose. The Court granted liberty to the respondents to proceed in accordance with law, including issuing a show cause notice if required, based on the material already gathered and statements recorded.

Key Issues

1. Whether the repeated issuance of summons under Section 70 of the Central Goods & Services Tax Act, 2017, for the same cause of action, is justified and serves a useful purpose, considering the petitioner's consistent appearance and provision of documents? (Question of law and fact, turning on Section 70 of the CGST Act). Petitioner's arguments: The petitioner argued that the inquiry proceedings were being unduly prolonged through repeated summons for the same matter, and that his consistent appearance and cooperation indicated that the purpose of summoning him had been fulfilled. He also maintained that the services provided were GST-exempt. Respondents' arguments: The respondents argued that the investigation was necessary due to the petitioner's firm not initially charging GST, subsequent charging of GST, and failure to submit proper details. They asserted that the issuance of summons was justified to gather information and ensure compliance.