Summons issued directing appearance cannot be quashed for failure of taxpayer to cooperate in ongoing investigations

Hearing a petition challenging summons issued under Section 70 of the CGST Act, the High Court of Madras observed that an Assessee is obligated to cooperate with ongoing investigation.

A Single Judge Bench of Dr. Anita Sumanth observed that as the Assessee had not appeared pursuant to summons to either tender information or to cooperate in the continuing investigation, the Bench refused to quash the summons, which were issued directing appearance of the Assessee.

The Petitioner-Assessee was represented by Mr R Senniappan, Advocate, whereas the Respondent-Revenue was represented by Mr. T. Ramesh Kutty Senior Panel Counsel.

The Revenue claimed to have certain information indicating that the Assessee had engaged in GST evasion. The Revenue visited the business premises of the Assessee with intent to conduct Search operations at the premises. As no one was available to answer the queries of the Revenue, the premises were sealed by the Revenue.

On being contacted, the Assessee stated that the concerned persons were travelling, due to which no one was available there. The Assessee was thereafter called in for providing certain information. The Assessee appeared before the Revenue and provided certain information that was called for, Statements were recorded but no further appearances by the Assessee were made and the Assessee’s premises remained sealed.

Thereafter, fresh summons were issued to the Assessee, against which the present petitions were filed. The Assessee also sought that its premises be de-sealed, so that it may resume its business operations.

On hearing the contentions of both parties, the Bench observed that the Assessee was duty bound to cooperate in the proceedings for investigation. Noting that the Assessee neither appeared in response to the Summons issued to it, nor tendered information or cooperated in the investigation, the Bench deigned to quash the summons issued.

Nevertheless, to balance de-sealing of the Assessee’s premises as well as continue the investigation, the Assessee was directed by the Bench to appear before the Revenue officer concerned, to participate in hearing. The Bench also directed the Assessee to present a written request seeking de-sealing of its premises and necessary documents be adduced along with such application.

Cause Title: M/s Saifee Enterprises vs Principal CCE [WP No.17950 of 2023 / 2023-Enterslice-18-HC-Mad-GST]

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Saifee-Enterprises-vs-Principal-CCE