2023 (10) TMI 1075 - HC - GST

GST Inquiry Upheld: Petitioner Cooperated, Investigation Continues with Procedural Safeguards Under Rule 138.9

The HC dismissed the writ petition challenging GST inquiry proceedings. The court found that the petitioner had cooperated with the investigation, ... Validity of Inquiry proceedings - Physical presence for all the times by issuing summons - HELD THAT:- The purpose of summoning the petitioner for the enquiry apparently stands satisfied. It is for the respondents to proceed thereafter, in accordance with law in their wisdom if they still feel that further proceedings are to be initiated by issuance of a show cause notice. The provisions of Section 70 of the Act cannot be continued to be used for the purpose of enforcing the presence for all times to come. As noticed, the service is being provided to two Government institutions and there is sufficient record available with the respondents from the said offices. In the peculiar facts and circumstances, no useful purpose would be served to call the petitioner in pursuance of the summons issued under Section 70 of the Act hereafter. The present writ petition disposed off, giving liberty to the respondents to proceed in accordance with law regarding issuance of show cause notice if so required and to proceed further in pursuance to the material which they have already gathered and the statements of the officials which they have already recorded. Issues involved: The judgment addresses the relief sought in a writ petition to quash inquiry proceedings under the Central Goods & Services Tax Act, 2017. The petitioner challenges the issuance of multiple summons and the ongoing investigation related to services provided to government medical colleges exempted from GST.Issue 1 - Quashing of Inquiry Proceedings:The petitioner filed a writ petition under Article 226/227 of the Constitution of India seeking to quash the inquiry proceedings initiated by the respondents under the Central Goods & Services Tax Act, 2017. The relief claimed was based on the petitioner's objection to the summons issued on various dates under Section 70 of the Act concerning services provided to government medical colleges. The petitioner argued that the services were exempted from GST, and he had been cooperating with the investigation.Issue 2 - Investigation Details and Respondents' Stand:The respondents contended that the services were provided not only to government medical colleges but also to hospital-cum-medical colleges. They highlighted that the petitioner's firm did not charge GST initially, leading to objections. Subsequently, summons were issued due to the lack of response from the petitioner, who then started charging GST and demanded payment from the colleges. The investigation was deemed necessary as proper details were not submitted by the petitioner's firm.Judgment Details:The court noted that the petitioner had already deposited a sum under protest and had been complying with the investigation by providing necessary documents. The court emphasized that the purpose of summoning the petitioner appeared to be fulfilled, and the respondents should proceed further if deemed necessary, possibly by issuing a show cause notice. The court highlighted that the provisions of Section 70 of the Act should not be used indefinitely to enforce the petitioner's presence. Considering the circumstances and available records, the court concluded that calling the petitioner for further summons would not serve any useful purpose. Consequently, the court disposed of the writ petition, allowing the respondents to proceed lawfully, including issuing a show cause notice if required, based on the gathered material and recorded statements of officials.