Section 63: Power to summon persons to give evidence and produce documents :
Introduction:
In order to have a successful investigation, it is often necessary to question a suspect or a witness and seek information from him to unearth the tax evaded. Calling suspect or witness to give evidence or produce documents is an important step in investigation which helps to convert the findings into admissible evidence.
Summon, as understood in legal parlance, is intimation requiring a person to whom it is issued to appear to give evidence and /or produce documents, etc. The indirect tax statutes, namely, the Customs Act, 1962, Central Excise Act, 1962 and Finance Act, 1994 have provisions which empower the designated officers to summon witnesses to give evidence and/or to produce documents. The provision of Section 63 of CGST/SGST Act is largely borrowed from Section 108 of Customs Act, 1962 and Section 14 of the Central Excise Act, 1944.
Section 63 of CGST/SGST Act gives powers to a duly authorised CGST/SGST officer to call upon a person by issuing a summon to present himself before the officer issuing the summon to either give evidence or produce a document or any other thing in any inquiry which an officer is making. A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned.
A person who is issued a summon is legally bound to attend either in person or by an authorised representative, as such officer may direct. Thus it is to be noted that officer has the discretion to summon a person himself or to allow him to be represented by an authorised representative. The exemptions under section 132 and 133 of Code of Civil Procedure, 1908 applies to requisitions for attendance under the CGST/SGST Act.
A person summoned is bound to state the truth before the officer who has issued the summon upon any subject respecting which they are examined or make statements and produce such documents and other things as may be required. This proceeding will be deemed to be a ‘judicial proceeding’ as understood under section 193 and section 228 of the Indian Penal Code, 1860.
Section 193 of IPC, 1860 contains penal provision for giving false evidence under summons and section 228 of IPC, 1860 contains penal provisions for intentionally insulting or interrupting the Officer sitting in summons proceedings. Accordingly these provisions of IPC can be invoked where the person summoned under CGST/SGST Act gives false evidence or interrupts the proceedings under summons.
Sections 172, 174 and 175 of Indian Penal Code, 1860are also relevant as they contain penal provisions in case of person:
i. Absconding to avoid service of summons or other proceeding;
ii. Non-attendance in obedience to an order from public servant;
iii. Omission to produce document or electronic record to public servant by person legally bound to produce it.
Under Civil Procedure Code, 1908, (CPC), there are some categories of persons who are exempt from being summoned. Section 132 of CPC provides exemption to the women who, according to the customs and manners of the country, ought not to be compelled to appear in public shall be exempt from personal appearance in Court. Section 133 of CPC provides entitlement to exemption from personal appearance in Court to some dignitaries, such as the President of India, the Vice President of India and some other high dignitaries of the State/ Government. All these exemptions will apply in respect of summons issued under the CGST/SGST Act.
The power to summon has a vital bearing in an enquiry under the CGST/SGST Act. The evidence so gathered will have a bearing on the quality of adjudication proceedings. Status of the person summoned is of no consequence. However, sufficient care should be taken to summon only such persons who would have first-hand knowledge of material relevant to the investigation being conducted. It must be ensured that the procedural safeguards are not violated.
The Central Board of Excise and Customs (CBEC) in the Department of Revenue, Ministry of Finance has issued guidelines from time to time to ensure that summons provisions are not misused in the field. Some of the important highlights of these guidelines are given below:
i. summons are to be issued as a last resort where assesses are not co-operating and this section should not be used for the top management;
ii. the language of the summons should not be harsh and legal which causes unnecessary mental stress and embarrassment to the receiver;
iii. summons by Superintendents should be issued after obtaining prior written permission from an officer not below the rank of Assistant Commissioner with the reasons for issuance of summons to be recorded in writing;
iv. where for operational reasons, it is not possible to obtain such prior written permission, oral/telephonic permission from such officer must be obtained and the same should be reduced to writing and intimated to the officer according such permission at the earliest opportunity;
v. in all cases, where summons are issued, the officer issuing summons should submit a report or should record a brief of the proceedings in the case file and submit the same to the officer who had authorised the issuance of summons;
vi. senior management officials such as CEO, CFO, General Managers of a large company or a PSU should not generally be issued summons at the first instance. They should be summoned only when there are indications in the investigation of their involvement in the decision making process which led to loss of revenue.