Proceedings were stayed where investigation was carried out by Central and State Department on the very similar issue at the same time.

Himanshu Balram Gupta v. Union of India

High Court of Gujarat

R/Special Civil Application No. 16271 of 2020

Category: Summon under Section 70 – Jurisdictional Challenge

Date of Judgement: 1 February 2021

Relevant Sections: Section 70 of CGST Act, 2017 and GGST Act, 2017

Takeaway: Jurisdictional overlap does not invalidate summons under Section 70

Facts of the Case [Paras 1–6]

1. The petitioner, a sole proprietor of M/s. S.H. Exports, was registered under the GST regime in Delhi and under the jurisdiction of the Central GST Commissionerate, Delhi South [Para 4(2)].
2. The Delhi GST authorities had already initiated an investigation and issued summons under Section 70 along with permission for search operations at the petitioner’s premises [Para 4(3)].
3. Parallelly, the Directorate General of GST Intelligence (DGGSTI), Ahmedabad also issued summons for the same subject matter, which led to the filing of the writ petition under Article 226 before the Gujarat High Court [Para 4(3)].
4. The petitioner contended that only the Delhi Commissionerate had jurisdiction and thus, DGGSTI Ahmedabad could not issue a second summons or undertake a parallel inquiry [Para 4(4)].

Question(s) in Consideration [Para 18]

• Whether a writ petition is maintainable under Article 226 of the Constitution to challenge summons issued under Section 70 of the CGST Act, especially when issued by a non-jurisdictional authority?

Observations of the Court

1. The High Court held that Section 70 confers judicial nature upon summons, and investigation at this stage does not warrant court interference unless there is grave abuse or mala fides [Paras 7–11, 18–20].
2. Reference was made to Supreme Court’s ruling in Union of India v. Rajnish Kumar Tuli where interference at the stage of summons was held unwarranted [Para 20].
3. The petitioner’s reliance on Shafi Khan Khokhar v. State of Maharashtra and Commissioner of Customs v. Sayed Ali was found misplaced, as those cases were distinguishable on facts [Para 22].
4. The DGGSTI justified its action stating that the petitioner availed ineligible ITC based on fraudulent invoices from M/s SSM Exports, and hence the investigation was valid and necessary [Paras 6.5.2–6.5.3].
5. The court agreed that DGGSTI has all-India jurisdiction to investigate such cases, referencing the Delhi High Court judgment in NBCC v. Union of India [Para 17].

Judgement of the Court [Para 23]

• The Gujarat High Court held that a writ petition against issuance of summons under Section 70 is not maintainable. The petition was rejected and interim relief was vacated.

Between Fine Lines (Simple Summary)

• GST summons under Section 70 are judicial in nature and cannot be lightly challenged through writ petitions.
• Jurisdictional overlap between DGGSTI and local Commissionerate does not invalidate a summons.
• If fraudulent ITC is suspected, multiple agencies can investigate in the interest of revenue.
• Personal appearance can be required unless compelling reasons justify exemption.
• Fear of arrest is not a valid ground to quash summons at the pre-show-cause stage.

Summary of Referred Cases