CPC Summons Procedure Not Applicable to GST Inquiry; No 7-Day Notice Required: Bombay High Court

Interpreting Section 70 of the Central Goods and Services Tax Act, 2017, the Bombay High Court has held that the civil court summons procedure under the Code of Civil Procedure cannot be read into GST investigations and that tax authorities are not required to give seven days' prior notice before summoning a person for inquiry.

A Division Bench of Justices Sandipkumar C. More and Y.G. Khobragade at the Aurangabad Bench dismissed the Criminal Writ Petition filed by Kanhaiya Nilambar Jha, who sought Rs 10 lakh as compensation for alleged illegal detention by GST officers.

According to the Jha, GST officers picked him up on June 17, 2025 without issuing any summons or arrest memo and kept him at the CGST office until June 20.

His formal arrest was recorded only on June 21.

The arrest was in connection with offences punishable under Sections 132(1)(b), 132(1)(c) and 132(1)(i) of the CGST Act, which relate to issuance of fake invoices without supply of goods or services, wrongful availment of input tax credit, and abetment or attempt to commit such offences.

During the hearing, the petitioner did not press his prayers challenging the legality of the arrest and the magisterial remand order. He confined his petition to seeking compensation for the alleged illegal detention between June 17 and June 20.

He contended that Section 70 states that summons shall be issued in the same manner as in the case of a civil court under the Code of Civil Procedure, 1908. On that basis, he relied on Order XVI of the Code of Civil Procedure, which deals with summoning and attendance of witnesses in civil proceedings, and argued that seven days' prior notice was mandatory.

The Union of India opposed the plea, submitting that the petitioner was summoned in connection with an inquiry into fraudulent utilisation of input tax credit and had attended pursuant to summons issued under Section 70. It was stated that no arrest took place before June 21 and that the statutory procedure was followed.

Examining the language of Section 70, the Court held that the provision does not prescribe any minimum time gap between issuance of summons and appearance.

The bench observed:

"Therefore, on going through the aforesaid observations as well as language of Section 70 of CGST Act, it cannot be held that there was need of 7 days notice for issuing summons under Section 70 of the CGST Act. On the contrary, it has to be held that a person can be summoned for making inquiry and recording his statement under the said provision which does not amount to detention."

The Court observed that Order XVI relates to summoning of witnesses at the trial stage and declined to accept its application to summons issued during inquiry under Section 70 of the GST Act.

The bench noted that the petitioner had acknowledged the summons by signing them and attended on the specified dates without raising objection. It also recorded that he was allowed to use his four mobile handsets during the relevant period.

Rejecting the compensation claim, the court held:

“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.”

The petition was accordingly dismissed.

For Petitioner: Advocates R.F. Totala, instructed by Vedant Kabra.

For Respondents: Deputy Solicitor General of India A.G. Talhar, along with Advocates Pratik Bothari and Nandini Chittal for Respondent Nos. 1 to 4; and Additional Government Pleader S.R. Wakale for Respondent No. 5 (State).