Gujarat issues guidelines for issuing summons, arrests under GST Act

The Finance Ministry has issued a set of guidelines detailing conditions for investigation, summons, arrests and bail procedures under the Goods and Services Tax Act, 2017 for violating GST provisions. There is a requirement that approval for arrest under the GST Act be granted for cases wherein a clear intent of tax evasion or committing violation exists. The Ministry of Finance notification stated that approval for arrest should not be granted if there is a difference in legal opinion in interpretation of the law.

In case an accused is arrested for a violation of the GST Act, arrest procedures under the Criminal Penal Code CrPC need to be followed, according to these guidelines. As per the guidelines, information regarding arrests under the Act must be sent to the Directorate General of GST Intelligence DGGI every month.

The guidelines, as per Section 70 1 of the CGST Act, can be issued by the proper officer to any person who is considered necessary for giving evidence or producing a document, or any other thing in an inquiry, in the same manner as provided in the case of a civil court. These should also indicate the names of the offender against whom the investigation is not detrimental to the cause of the probe to provide a prima facie understanding of the capacity in which the accused, co-accused or witness has been summoned.

When issuing summons under the GST Act, officials must make sure that this is done in a judicious manner. Authorities are advised to look at incidents where a letter of requisition may suffice rather than issuing summons.

Here are the Finance Ministry guidelines for issuing summons under the GST Act:

The power to issue summons generally rests with the superintendents, though senior officials can also issue summons.

Superintendents must obtain written permission from an officer on the rank of Deputy Assistant Commissioner to issue a summons.

The summons officer must be present at the time and date the summon has been issued.

In the event of an emergency, the summoned person should be informed in advance orally.

In cases where getting a written permission beforehand is not possible, oral telephonic permission should be obtained from an officer on the rank of Deputy Assistant Commissioner, and should be reduced to writing and intimated to the officer on the ground at the earliest.

Summons are avoided in cases where statutory documents are available digitally or in the GST portal.

In cases involving senior management officials CMD, MD, CEO, CFO or similar officers of a company or PSU summons should not be issued in the first instance.

When there are clear indications of their involvement in the decision making that led to loss of revenue, they should be summoned.