2026 (2) TMI 463 - HC - GST

Attendance under Section 70 CGST summons found not to be illegal detention, compensation claim dismissed by court

Attendance pursuant to a summons under the Central Goods and Services Tax regime does not, by itself, amount to illegal detention where statutory summons ... Power to summon u/s 70 - summons for inquiry does not amount to arrest or detention - no requirement of seven day's notice for summons u/s 70 - illegal detention and claim for compensation - fraudulent utilization of Input Tax Credit - limited judicial review of arrests under special statutes - Whether the petitioner was under illegal detention for the aforesaid period when he was summoned for recording statement under Section 70 of the CGST Act - HELD THAT:- Admittedly, from the record it is disclosed that when Anti-evasion Wing of CGST, Aurangabad generated a system generated intelligence indicating fraudulent utilization of ITC (Input Tax Credit) by Kabsan and passing on of GST without any supply of goods or services or both, an inquiry was commenced. On going through the copies of the summonses, it is clearly evident that they are received by the petitioner as well as these two persons without raising any objection by acknowledging them under their respective signatures. Further, after attending GST Bhavan at Aurangabad, the petitioner and Bhavik Mehta were again issued with similar summonses for attending GST Bhavan on 19.06.2025 for further inquiry. Thereafter on 19.06.2025 also the petitioner was called for inquiry on 20.06.2025. It is to be noted that the petitioner did not raise any objection for such attendance during period from 17.06.2025 to 20.06.2025. Thereafter on ascertaining the involvement of the petitioner he was arrested on 21.06.2025 and without any delay, produced concerned Magistrate, who granted him custody. Admittedly, on going through Section 70, it has been provided that the summons must be issued as provided in the case of Civil Court under the provisions of the Code of Civil Procedure, 1908 (5 of 1908). However, nowhere in this Section there is reference of 7 days prior notice. Learned counsel for the petitioner, for that purpose, relied on Order XVI of the C.P.C. which relates to summoning and attendance of witnesses. Though in the case of FSM Education Pvt. Ltd vs Union of India [2022 (1) TMI 551 - BOMBAY HIGH COURT] this Court had held that if any summons is required to be issued by the respondent, then it shall indicate the purpose of issuance of summoned with clear 7 days notice, however, this observation had come in the peculiar circumstances of that case only and this cannot be made directly applicable in the instant matter, considering the mandate of Section 70 of CGST Act. In the instant case, it appears that the petitioner had readily accepted the summons issued to him from 17.06.2025 to 19.06.2025. He readily acknowledged the summons by putting his signatures thereon and also attending on the dates. Further, during that period he did not make any complaint about his alleged illegal detention. Further, the record shows that he was kept in GST Bhavan at Aurangabad as per his own wish and he was also allowed to use his four mobile handsets from which he could have easily made contact with his family members. Under such circumstances, by no stretch of imagination, it can be held that the petitioner was under illegal detention at the hands of respondent Nos. 1 to 4 during the said period. Therefore, no question arises of awarding compensation to the petitioner, as claimed by him. With these observation, we find no substance in the present petition and accordingly it stands dismissed. Issues: Whether the period during which the person attended for inquiry (17.06.2025 to 20.06.2025) pursuant to summons under Section 70 of the Central Goods and Services Tax Act amounts to illegal detention entitling the person to compensation.Analysis: Section 70 of the Central Goods and Services Tax Act empowers a proper officer to summon any person for inquiry in the manner provided for a civil court under the Code of Civil Procedure; the provision contains no express requirement of seven days' prior notice. Order XVI C.P.C. relates to trial-stage witness lists and summons procedure and is not directly applicable to administrative or pre-arrest inquiries under Section 70. Precedents establish that a person summoned under Section 70 is not per se an accused and that Courts exercising judicial review in proceedings under special tax statutes must confine review to whether statutory and constitutional safeguards (such as authorized officer status, existence of material forming belief, and informing of grounds of arrest) were complied with, rather than reappraising the sufficiency of the investigative material. The material on record showed acknowledged service of summonses, attendance on the specified dates without objection, possession and use of personal mobile phones while at the GST office, and no contemporaneous complaint of detention; arrest was recorded and produced before a Magistrate on 21.06.2025.Conclusion: The period spent pursuant to summons under Section 70 from 17.06.2025 to 20.06.2025 did not constitute illegal detention and no compensation is warranted; the petition claiming compensation is dismissed.