TaxTMI 
TaxTMI 
2021 (1) TMI 130
X X X X Extracts X X X X
X X X X Extracts X X X X
....etition to the petitioner. Submissions:- 3. Sri Praveen Kumar, learned counsel for the petitioner submits as under:- (i) The respondent no.5 has inspected the business premises of the petitioner on 30.05.2018, which was followed by a summon dated 02.06.2018 under Section 70 of the U.P. GST Act. Lastly, a summon dated 14.09.2020 was issued by the respondent no.5- Assistant Commissioner (SIB), Commercial Tax, Range-C, Ghaziabad under Section 70 of U.P. GST Act, requiring the petitioner to explain two input tax credit taken by him. (ii) After the aforesaid summon dated 02.06.2018 issued by the respondent no.5, the respondent no.4 has issued summon dated 24.07.2019 under Section 70(1) of CGST Act, 2017, requiring the petitioner to tender his statement in the inquiry. The aforesaid summon was followed by summons dated 26.08.2019 and 26.08.2020. (iii) Once inquiry has been initiated by the respondent no.5 under U.P. GST Act, the respondent nos. 3 and 4 cannot initiate any proceeding in view of the provisions of Section 6 (2) (b) of U.P. GST Act, 2017. (iv) Since inquiry has already been initiated by the respondent no.5, therefore, the respondent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing him to submit explanation with respect to certain input tax credits taken by him including the input tax credit taken on the basis of invoices M/s Glider Traders Private Ltd., whose registration was cancelled several months prior to the date of the alleged invoice. 7. It appears that some inquiry was being conducted by the Directorate General of Goods and Services Tax Intelligence, Meerut Zonal Unit, Meerut, which issued summons dated 24.07.2019 to the petitioner under Sections 70 and 174 of the CGST Act, 2017 requiring the petitioner to appear in person on 25th or 26th July, 2019 at 12.00 hours to tender statement in person, but the petitioner has not responded to the summon. Another summon dated 26.08.2019 was issued to the petitioner by the respondent No.4 requiring the petitioner to submit copies of Invoices issued along with transport documents since July, 2017 till date, copies of invoices issued by suppliers and transport documents since July, 2017 till date, copies of purchase ledgers since July, 2017 till date, copies of Sales ledgers since July, 2017 till date, copies of Liability ledgers of ITC claimed and Cash deposited since July, 2017 till date and copies of Ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll be initiated by the proper officer under this Act on the same subject- matter. Chapter XIV (Inspection, Search, Seizure and arrest) Section 67. Power of inspection, search and seizure- (1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that-- (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a go down or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of State tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or go down or any other place. (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be. (7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided that the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months. (8) The Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section(2), be disposed of by the proper officer in such manner as may be prescribed. (9) Where any goods, being goods specified under subsection (8), have been seized by a proper officer, or any officer authorised by him under sub-section (2), he shall prepare an inventory of such goods in such manner as may be presc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hable under clause (i) or (ii) of sub-section (1), or sub- section(2) of the said section, he may, by order, authorise any officer of State tax to arrest such person. (2) Where a person is arrested under sub-section (1) for an offence specified under sub-section (5) of section 132, the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty-four hours. (3) Subject to the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), -- (a) where a person is arrested under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate; (b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station. Section 70. Power to summon persons to give evidence and produce documents.- (1) The proper officer under this Act shall hav....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... tax and officers of Union territory tax shall assist the proper officers in the implementation of this Act. (2) The Government may, by notification, empower and require any other class of officers to assist the proper officers in the implementation of this Act when called upon to do so by the Commissioner. Section 6 of the C.G.S.T. Act: Section 6 - Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances (1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify. (2) Subject to the conditions specified in the notification issued under sub-section (1),-- (a) where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rd "inquiry" in Section 70 is not synonymous with the word "proceedings", in Section 6(2)(b) of the U.P.G.S.T. Act/ C.G.S.T. Act. 11. In Liberty Oil Mills and others vs. Union of India and others, (1984) 3 SCC 465 (para-15), Hon'ble Supreme Court considered the provisions of Import and Export Control Act and Imports (Control) Order, 1955 where the word "investigation" was not defined and held that in the context it means the process of collection of evidence or the gathering of material. 12. Provisions of Section 70 has been enacted for collecting evidence in matters involving tax evasion which may also lead to confiscation. After inquiry is completed and materials for tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized, by reason of fraud or wilful misstatement or suppression of facts or otherwise are found, then it may lead to demands and recovery under Section 73 or Section 74, as the case may be. When action for assessment, demand and penalty etc. including action under Section 73 or 74 is taken, that shall amount to proceedings referable to Section 6(2)(b) of the Act but the inquiry under Section 70 is not a proceeding refer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nditions specified in the notification issued under sub-Section (1). Section 6(2)(b) of C.G.S.T. Act imposes similar prohibition upon the proper officer under the C.G.S.T. Act. Thus, Section 6(2)(b) of the C.G.S.T. Act/ U.P.G.S.T. Act prohibits initiation of any proceedings on the same subject-matter by a proper officer under the C.G.S.T. Act/ by a proper officer under the State G.S.T. Act, as the case may be, on the same subject-matter. 16. Section 70 of the U.P.G.S.T. Act or C.G.S.T. Act is part of Chapter XIV which contains provisions for inspection, search, seizure and arrest. Section 70 of both the Acts are pari materia which empowers the proper officer under the Act to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry. 17. Thus, Section 6(2)(b) of the C.G.S.T. Act prohibits separate initiation of proceedings on the same subject-matter by the proper officer under the C.G.S.T. Act when proceeding on the same subject-matter by the proper officer under the State Act has been initiated, whereas Section 70 of the U.P.G.S.T./ C.G.S.T. Act merely empowers the proper officer to summon any ....