How to Handle GST Summon?

Nowadays, as registered taxpayers, our inbox is flooded with several GST reminders. Likewise, we often missed out on an important notice for any other taxpayer. But, is it only a notice which is crucial? Are you missing out on a "summon"? How to handle the same? Before we jump into it, let's know more about it.

What is a summon?

 A summon, in simple words, is an order to appear or mark your presence before a judge or a magistrate for any enquiry or against wrongdoing which could be civil, criminal or both. It is also known as CAN in a few parts of the world, i.e. Court Attendance Notice. In legal terms, a summons is also known as a citation, requiring an under-mentioned person to be present at a notified place, at the advised time and for the announced purpose.

Broadly there are four types of summoning listed below;

* Judicial Summon
 
* Citation
 
* Administrative summons
 
* Civil Summon
 
The summons issued under the GST ACT is a type of Administrative summon. As per the case, the officer in charge can call any registered person to appear before and produce evidence or document.

How summon is different from a notice?   

All summons are notices, but all notices are not summoned.
 
As discussed above, a summon is an official call upon or invitation to mark your presence at the court or before an officer. However, notice is general information from the court/authority. Notice may or may not result in a summon.
 
As per GST ACT, a summon shall be deemed to be a "legal proceeding" under provisions of section 193 and the section 228 of the Indian Penal Code (45 of 1860).
 
On the contrary, the same doesn't apply to the notice.

Power to summon under the CGST ACT 2017.

 Section 70 of the C.G.S.T. Act, 2017: Power to summon assessee to give any evidence and in order to produce documents.
 
1: The proper officer under CGST Act shall have the power to summon any person whose presence he requires necessary to provide an evidence or produce a document or any other thing in any inquiry in the same ways, as provided in the case of a civil court procedure under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).
 
2: The inquiry referred to in sub-section (1) shall be considered to be a "Legal proceeding" under the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

When can I expect a summon?

Under Sec 70 of C.G.S.T. Act, summon can be issued when a taxpayer is undergoing any inquiry proceedings. Wherein inquiry could be initiated on non-satisfaction of any ground related to compliance, a requirement of law or the notice issued.
 
As per the latest judgment in the case of G.K. Trading Company Vs Union Of India And 4 Others (Allahabad High Court) wherein it was held that G.S.T. authorities are allowed to initiate inquiry proceedings under Section 70 of C.G.S.T. Act, 2017 combinedly with the proceedings under section 6(2)(b) as the prohibition of Section 6(2)(b) of the C.G.S.T. Act shall come into play only when any proceeding on the same subject-matter has already been initiated by a proper officer under the U.P.G.S.T. Act and therefore, an adequate officer under the U.P.G.S.T. Act or the C.G.S.T. The Act may invoke the power under Section 70 in any inquiry.
 
Therefore, by the above judgment, it's pretty clear that you can expect a summon collaterally with the other proceedings under the Act, be it an investigation, search, seizure either to give any evidence or produce a document or anything.
 
Below are the few listed matters on which inquiry could be initiated if considered necessary by the proper officer;
 
* The Input tax credit taken is wrongly availed or utilized.
 
* G.S.T. Refund is wrongly made with or without the intent to defraud.
 
* Non-payment of G.S.T. liability (tax) or the short payment of the tax with or without the intent to defraud.
 
* Differences in Input tax credit claims made in GSTR-3B vis-a-vis GSTR-2A/2B
 
* Delay in filing of GSTR-1 and GSTR-3B consecutively for more than six months
 
* Inconsistent declaration in GSTR-1 and e-way bill portal. Etc

Features a taxpayer should know about a summon.  

* As per one of the circulars, summons should be used only as a last resort when it is absolutely required.
 
* All persons to whom summons are issued shall be bound to attend, either in person or by an authorized agent, if the taxpayer is not a natural person.
 
* An officer of the rank Superintendent and above are empowered to issue a summon.
 
* If you are not comfortable with the English language, you can record your statement in a local language.
 
* Even if the taxpayer files all the documents with the officer as mentioned in the summons letter, the taxpayer must attend the summons.
 
* Summons may be issued to you even in the investigation launched against some other person.
 
* The person summoned is bound to submit all the relevant documents asked for. If not available, state the reasonable time required to provide the same.
 
* A statement is generally recorded during such summons.
 
* A recorded statement is admissible as evidence and can be used against the person in legal proceedings.
 
* The statement should be voluntarily given and not under threat, coercion, or pressure.
 
* The person should be summoned and a statement taken during working hours.

Who could be G.S.T. summon consultant?

A practising Chartered Accountant, an Advocate, Cost and Management Accountant or any other professional possessing such knowledge and experience as would be considered sufficient to handle the complexity of the case.

Procedure for replying GST summon?

Any taxpayer who receives the summon shall first consult a GST summon consultant. Who, could be a legal practitioner, be it a Chartered Accountant in practice or an Advocate, to know the reason and justification behind such summon? (As per law, the power to call can be exercised only when there is a need for the appearance of the assessee)
 
A taxpayer should be mindful that summons is a legal proceeding, which cannot be ignored. Once the taxpayer and the practitioner are satisfied with the justification and purpose of the summon, the taxpayer shall block his calendar for the notified date.
 
The taxpayer shall state the facts and figures to the practitioner to accumulate and produce objective evidence and statements before the authority. Before the call upon date, he shall be handful with all the required evidence, documents and statements before the authority.
 
Under the rigorous inquiry from the authority, the taxpayer shall not testify and sign any documents before reading and understanding the same.

Penalty for non - compliance of GST summon?

All persons to whom summons are issued shall be bound to attend, either in person or by an authorized agent, if the taxpayer is not a natural person.
 
If a taxable person does not act upon before the officer of central tax, when issued with a summon for appearance to provide the evidence or produce a document in an inquiry, is liable to pay the penalty under section 122 (3) of the C.G.S.T. Act,2017, i.e., Rs.25000.

How to deal with GST summon?

* GST Summon Consultant – Assessee shall consult the practitioner to know the reason and justification of the summon.
 
* Block your calendar – Assessee shall block his calendar for the specified dates.
 
* Produce – Assessee shall produce before the practitioner all the facts, figures, evidence and state the absolute truth.
  
* Be handful – Assessee shall be a handful with all the required documents and information.
 
* Be mindful – You should be cognizant while recording your statement; this could be used against you.
 
* Don't promise – During the summon inquiry, do not explicitly promise to pay any taxes or penalties; always consult with your practitioner about this.
 
* Have your words ready – As we emphasize from the beginning, consult exclusively and be prepared with your comments and performance and disclaim wisely when you are not sure about the same.
 
* Be confident – Don't panic in any situation and act wisely and confidently with a fearless attitude.

In conclusion, receiving a GST summon is a serious matter that should not be ignored. It is essential to consult a GST summon consultant, gather necessary evidence, and be prepared to appear before the authority. Compliance is crucial to avoid penalties. Stay confident and consult with professionals throughout the process.

Take control of your GST summons - Consult a GST summon consultant now at info@manishanilgupta.com and be prepared to handle the legal proceedings with confidence.

Disclaimer: This content is purely for knowledge and educational purposes. It contains only general information and references to legal content. It is not legal advice, and should not be treated as such