28.01.2022 – Summons are not required to be issued where the assessee is cooperating during the inquiry and must be used as a last resort

The Hon’ble High Court of Bombay vide its Order dated 10.01.2022 in the matter of FSM Education Pvt. Ltd. v. Union of India, through the Principal Secretary, Department of Revenue, Ministry of Finance, Mumbai and others in Writ Petition (L) No. 30974 of 2021 held that the Summons on the assessee can be issued only when it is not cooperating with the department to provide the required documents.

Plea – The Petitioner preferred the Writ petition before the Hon’ble High Court for quashing and set aside the summons issued to Ms. Tanuja Gomes, one of the directors of the Petitioner and seeking directions to the Respondents to conduct enquiry without initiating summons and interrogation unless found necessary and only by due adherence of the law.

Facts – The Petitioner received a communication dated 02.12.2021 on the letter head of the Commissioner of CGST, Mumbai West requesting to provide certain documents within period of for days from the receipt of the Notice. The Petitioner duly provided all the documents to the department as and when required, however, the Respondent issued a summon dated 15.12.2021 to the Petitioner to remain present before it on 16.12.2021. The Petitioner, in pursuance of the summons, deputed its Accounts Manager (Mr. Piyush Patel) for the same and he was grilled and interrogated for five hours and was also subjected to cross-questioning which is contrary to the guidelines issued by the Respondent No. 1.

Petitioner’s submissions – In this regard, following were the inter-alia submissions of Petitioner before Hon’ble Court –

  • Summons cannot be issued to coerce and pressurize the Petitioner or its director when all the required documents have already been submitted to the department.
  • The Consultant of the Petitioner would remain present before the Respondents and would provide all the documents required and if the Respondents are not satisfied, only in that event, Ms Tanuja Gomes would remain present before the authority in response to the summons.

Held – The Hon’be High Court after considering the submissions made held that –

  • Question 34 of FAQ’s dated 15.12.2018 issued by CBIC clearly indicates that issuance of summons is a last resort and are not issued in casual manner. There are no allegations made by the Respondents alleging non-cooperation on the part of the Petitioner.
  • The Respondents are directed to inform the Petitioner the list of further documents required to be produced by the Petitioner.
  • The Consultants would cooperate with the Respondents and would provide the information and documents required within prescribed time.
  • It is for the department to decide whether Mr. Tanuja Gomes, director of the Petitioner shall be still called for recording of evidence after the furnishing of the required documents by the Consultant and in case any summon is required to be issued, it should indicate the purpose of issuing the summon with clear 7 days notice before fixing the date of recording of statement of the said director.
  • Impugned summons dated 23.12.2021 issued to the director of the Petitioner would not survive in view of the undertaking given by the Petitioner and in view of the aforesaid directions issued by this Court.

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