GST summons Issued For Inquiry, Don't Amount To Detention: Bombay High Court

The Aurangabad Bench of the Bombay High Court has dismissed a criminal writ petition seeking Rs. 10 lakh compensation for alleged illegal detention by GST authorities, holding that summons issued under Section 70 of the Central Goods and Services Tax (CGST) Act do not mandate a prior seven-day notice and that the petitioner was not illegally detained. The Division Bench of Justice Sandipkumar C. More andJustice Y.G. Khobragade has observed that section 70 of the CGST Act does not expressly prescribe any seven-day prior notice requirement. Order XVI CPC pertains to summoning witnesses at the trial stage after settlement of issues and cannot be mechanically applied to GST inquiry proceedings. The language of Section 70 permits issuance of summons for inquiry, and such inquiry does not amount to detention. The petitioner acknowledged receipt of summons and attended proceedings without objection. During the period in question, he was allowed to use his mobile phones and did not lodge any complaint of illegal detention. The petitioner, aged 38, claimed that he was unlawfully taken into custody by officers of the CGST & Central Excise Department on June 17, 2025, from Mumbai and transported to Chhatrapati Sambhajinagar without being issued a proper summons or arrest memo. He alleged that he was detained at the GST Bhavan from June 17 to June 20, 2025, without being produced before a Magistrate, and that his formal arrest was shown only on June 21, 2025. The arrest was made under Section 69 of the CGST Act in connection with alleged offences under Sections 132(1)(b), 132(1)(c), and 132(1)(i), relating to fraudulent availment and passing of Input Tax Credit (ITC) without actual supply of goods or services. Although the petitioner initially sought to have his arrest declared null and void and to quash the remand order, during the course of arguments he limited his prayer to compensation of ₹10 lakh for alleged illegal detention. The petitioner contended that he was detained without valid summons between June 17 and June 20, 2025. The summons were fabricated after he was taken into custody. Under Section 70 of the CGST Act, read with Order XVI of the Code of Civil Procedure (CPC), a minimum seven-day notice was mandatory before requiring appearance. The authorities violated Articles 21 and 22 of the Constitution. Supreme Court rulings in Joginder Kumar v. State of U.P. and D.K. Basu v. State of W.B. mandated strict safeguards against illegal detention. He also relied on a Bombay High Court decision in FSM Education Pvt. Ltd. v. Union of India, where observations were made regarding issuance of summons with adequate notice. The Union of India and CGST authorities opposed the petition, asserting that The petitioner was summoned under Section 70 of the CGST Act as part of an inquiry into large-scale fraudulent ITC claims by M/s Kabsan Services Pvt. Ltd. System-generated intelligence had revealed alleged fraudulent availment of crores of rupees in ITC. The petitioner was managing the affairs of the company. He voluntarily attended proceedings from June 17 to June 20, 2025, under duly issued summons. He acknowledged receipt of the summons by signature and did not object at the time. He was formally arrested on June 21, 2025, after material indicating involvement was gathered, and was produced before the Magistrate without delay. The department also pointed out that multiple electronic devices, including 42 mobile phones and laptops, were seized during the investigation. The principal question before the Court was whether failure to provide seven days’ notice before issuing summons under Section 70 rendered the proceedings illegal. Section 70 empowers a “proper officer” to summon any person to give evidence or produce documents “in the same manner” as a civil court under the CPC. The petitioner argued that this incorporation required adherence to Order XVI CPC, which he interpreted as requiring a minimum seven-day notice. The Court further relied on the Supreme Court’s decision in Radhika Agarwal v. Union of India, which upheld the constitutional validity of Sections 69 and 70 of the GST Acts and clarified that powers of summons and arrest are ancillary to effective tax enforcement. The Supreme Court had emphasized that judicial interference in such matters is warranted only in exceptional cases involving mala fides, lack of authority, or clear statutory violations. The High Court concluded that the petitioner was summoned for inquiry and not unlawfully confined. There was no material to establish illegal detention between June 17 and June 20, 2025. His formal arrest on June 21, 2025, was followed by prompt production before the Magistrate. In the absence of proof of unlawful custody, no compensation could be awarded. The Court held that “by no stretch of imagination” could the petitioner’s presence pursuant to summons be termed illegal detention. Finding no merit in the claim, the Court dismissed the writ petition and discharged the Rule. Case Details Case Title: Kanhaiya Nilambar Jha Versus UOI Case No.: Criminal Writ Petition No. 885 Of 2025 Date: 05.02.2026 Counsel For Petitioner: R.F. Totala Counsel For Respondent: A.G. Talhar Click Here To Read Order

GST summons Issued For Inquiry, Don’t Amount To Detention: Bombay High Court

Membership Required

Latest articles

No Service Tax On Payments Made To Protection And Indemnity Club For Mutual Insurance Cover: CESTAT

Service Tax Demand on Commission Paid to Foreign Ship Brokers Quashed Citing Defective SCN: CESTAT

Appellate Authority Can’t Direct Re-Examination of Refund Limitation When Timeliness Was Never Disputed by Dept.: CESTAT

Manufacturing Costs Of Other Items, Administrative Overheads Can’t Be Included In Production Cost For Valuation Of Goods Transferred To Sister Units: CESTAT

More like this

No Service Tax On Payments Made To Protection And Indemnity Club For Mutual Insurance Cover: CESTAT

Service Tax Demand on Commission Paid to Foreign Ship Brokers Quashed Citing Defective SCN: CESTAT

Appellate Authority Can’t Direct Re-Examination of Refund Limitation When Timeliness Was Never Disputed by Dept.: CESTAT

About us

Company

Categories