GST inquiry summons and evidence gathering distinguished from initiation of proceedings; anticipatory relief at investigatory stage denied and writ dismissed.
Summons issued for recording statements and producing invoices during a GST search were treated as an inquiry-stage evidence-gathering step, not the initiation of criminal proceedings; the court reasoned that issuing such summonses was within statutory powers and not illegal, and that anticipatory relief at this investigatory stage was premature. The petition alleging extraordinary tax fraud and non-cooperation failed to displace the investigatory character of the summons; one accused had already been released on bail. The writ petition was dismissed without prejudice to pursuing remedies at the appropriate later stage.
Issues: (i) Whether the summons issued under Section 70 of the CGST Act, 2017 (challenged summons dated 06.05.2024, 20.05.2024 and 28.05.2024) are illegal and liable to be set aside; (ii) Whether the Court should direct release of papers/documents/goods seized on 23.03.2024 and restrain the respondent from detaining the petitioners in odd hours.
Analysis: The Court analysed statutory scheme and precedents holding that a summons under Section 70 is a tool of inquiry to collect information and is not the initiation of proceedings for recovery; searches under Section 67 may lead to evidence which the Department may thereafter decide to act upon under assessment provisions. The Court noted safeguards in Section 69 concerning arrest and referred to authorities clarifying that anticipatory bail may be considered where apprehension of arrest is clear. The Court examined the facts including alleged procedural deficiencies in the panchnama and the respondents' account of materials seized and statements recorded, and concluded that summons were issued for recording statements and production of documents arising from search and investigation and were within the Department's powers. The petition was held to be premature to seek reliefs amounting to anticipatory bail or stay of investigative steps, and the petitioners were granted liberty to pursue appropriate remedies at the appropriate stage.
Conclusion: The writ petition challenging the summons and seeking release of seized papers/goods and restraint on detention is dismissed. The Court found no illegality in issuance of the summons and declined to grant interim protection; the decision is against the petitioners and in favour of the Revenue.
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