Bombay High Court concerned about GST's coercive action

Bombay High Court concerned about GST's coercive action

It directs the department to issue norms on summons during the investigation

The Bombay High Court has expressed concern over the allegations made by several assessees in petitions about the repeated summons issued by the Goods and Services Tax (GST) authorities. It has been alleged that during the investigations, the department, without the issuance of show-cause notice, has been harassing by way of taking coercive action for the recovery of substantial amounts.

The division bench of Justice R D Dhanuka and Justice S M Modak was hearing a writ petition seeking directions to restrain the GST authorities from resorting to such measures.

Represented by advocates Vinay Shraff and Nikhil Rungta, the petitioners argued that despite fully participating in the investigation proceedings, the GST department was repeatedly issuing summons. It was coercing people into making payments of the disputed amounts of tax. This was in contravention of the mandate of the law, which provides for the issuance of a show-cause notice.

The court, thus, passed an order directing the department to issue norms as to how many times, such summons could be issued against the assessees and for what purpose. It also directed that a copy of the order be forwarded to the Additional Director General and the Directorate General of GST Intelligence, Pune to personally look into the matter of the petitioner.

It further ordered the GST department to provide seven days' notice in case it proposed to adopt coercive steps for the recovery of any amount. In such an event, the petitioner would be at liberty to apply for interim relief.