DGGI’s Investigative Powers Upheld: HC Dismisses Pleas Challenging GST Summons

The Delhi High Court has dismissed two writ petitions challenging summons issued by the Directorate General of Goods and Services Tax Intelligence (DGGI) under Section 70 of the Central Goods and Services Tax Act, 2017, holding that the summons are only a step in investigation and do not amount to initiation of proceedings or coercive action. The bench of Justice Neena Bansal Krishna observed that the petitions were premature and found no merit in the challenge to the summons or the investigation being carried out by GST authorities. The petitions arose from searches and seizures conducted by DGGI in March and May 2024 in connection with alleged clandestine trading of bidi under the “Udaan” brand. One petition challenged a summons dated May 6, 2024, issued to a Delhi-based trader following a search at his business premises and an undeclared godown, during which bidi goods worth over ₹7 lakh were seized. The second petition was filed by a West Bengal-based manufacturer whose factory and residence were searched in May 2024. The petitioners contended that all purchases and sales were backed by proper tax invoices, banking transactions, and regularly filed GST returns. They argued that the summons were issued with mala fide intent, violated departmental circulars, and amounted to harassment. It was further claimed that no assessment or show-cause notice had been issued and, therefore, the investigative action was unwarranted. The DGGI, opposing the petitions, asserted that investigations revealed evidence of clandestine trading, undeclared warehouses, and non-duty-paid goods. According to the department, the summons were issued to confront the petitioners with evidence collected during coordinated searches at multiple locations, including transporters and railway parcel offices. The department maintained that the petitioners had not fully cooperated with the investigation and that the apprehension of arrest was unfounded. It relied on judicial precedents to argue that courts should not interfere at the stage of summons or inquiry The High Court examined the scope of Section 70 of the CGST Act, which empowers officers to summon persons to give evidence or produce documents during an inquiry. The Court emphasized that a summons is merely a tool for gathering information and does not signify that proceedings for tax recovery or prosecution have commenced. Relying on earlier decisions of the Delhi High Court and the Supreme Court, the Court reiterated that issuance of summons cannot be equated with initiation of proceedings under Sections 73 or 74 of the CGST Act. It also noted that inquiries under Section 70 are deemed judicial proceedings, obligating summoned persons to cooperate truthfully, but they remain investigative in nature Addressing concerns over possible arrest, the Court pointed out that sufficient statutory safeguards exist under Section 69 of the CGST Act. Any arrest can only be made if the Commissioner has “reasons to believe” that an offence under Section 132 has been committed, and the grounds of arrest must be communicated to the person concerned. The Court observed that mere issuance of summons or ongoing inquiry does not automatically lead to arrest, and judicial intervention at this stage would unnecessarily hamper investigations Concluding that the petitions sought to stall a lawful investigation, the Court held them to be premature and dismissed both writ petitions. However, it clarified that the petitioners remain free to approach appropriate forums at a later stage if adverse proceedings are initiated against them. The court allowed the DGGI to continue its investigation in accordance with law. Case Details Case Title: Md. Aniqul Islam Versus DGGI Case No.: W.P.(CRL) 1710/2024, CRL.M.A. 16659/2024 Date: 16/12/2025 Counsel For Petitioner: Manisha Gupta, Advocate Counsel For Respondent: Anurag Ojha, SSC Click Here To Read Order Read More: Refund of Excess Infrastructure Cess on Imported Electric Golf Carts: Delhi HC Orders Re-Assessment of Bills of Entry

DGGI’s Investigative Powers Upheld: HC Dismisses Pleas Challenging GST Summons

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