M/S Om Shiv Associates Through vs. Union Of INDIA

Held

The Court held that the petitioner had failed to establish that proceedings under Section 70 of the CGST Act, 2017, are contingent upon a prior decision under Section 73 of the Act. The Court noted that Section 70 of the CGST Act, 2017, empowers the proper officer to summon any person whose attendance is considered necessary for giving evidence or producing documents in any inquiry, similar to the powers of a civil court under the Code of Civil Procedure, 1908. Furthermore, inquiries under Section 70 are deemed judicial proceedings. Prima facie, the Court found that the petitioner had evaded tax and was not inclined to grant any indulgence. The Court refused to quash the notice for personal hearing and dismissed the petition.

Facts

The petitioner, M/s Om Shiv Associates, a Civil Contractor, was issued multiple notices and summons by the GST authorities between June 2016 and June 2019. These communications requested various financial and tax-related documents for the financial years 2013-14, 2014-15, and 2016-17 up to June 2017. The authorities invoked provisions of the Central Excise Act, 1944, and the Finance Act, 1994, initially, and later the CGST Act, 2017. The petitioner repeatedly failed to provide the requested information. Instead, the petitioner insisted that a decision on their application under Section 73 of the Finance Act, 1994, read with Section 73 of the CGST Act, 2017, be made before any further proceedings. The petitioner was subsequently issued a notice for personal hearing on June 6, 2019, for April 18, 2019, which was scheduled for June 24, 2019. The petitioner filed the present writ petition seeking to quash the personal hearing notice and a direction for the authorities to decide their representation first.

Key Issues

1. Whether the proceedings under Section 70 of the CGST Act, 2017, can only be initiated after a decision has been made under Section 73 of the CGST Act, 2017? Petitioner's argument: The petitioner contended that the authorities should first decide their representation under Section 73 of the Finance Act, 1994, read with Section 73 of the CGST Act, 2017, before initiating any further proceedings, implying a procedural prerequisite. Revenue's argument: The Revenue, through the notices and summons, implicitly argued that the power to summon and gather information under Section 70 of the CGST Act, 2017, is independent and can be exercised to investigate potential tax evasion, irrespective of any pending representation under Section 73. The judgment notes that the petitioner failed to establish that Section 70 proceedings are contingent on a Section 73 decision.