Facing a DGGI Summons? GST Defence from the First Notice to the Appellate Tribunal

The first sign of a GST investigation is usually a piece of paper: a summons from the Directorate General of GST Intelligence, a CGST commissionerate or the State GST department, asking a director, an accountant or the proprietor to appear with documents. What happens in the next few weeks often decides the case. This guide explains DGGI summons GST defence in order: the summons, the search, the arrest power, the show cause notice, registration action and the appeal, with the safeguards the Supreme Court and the CBIC have laid down at each stage.

Who is Investigating, and Why it Matters

GST is administered by two sets of officers. The Central Board of Indirect Taxes and Customs (CBIC) oversees the CGST commissionerates, audit commissionerates and the Directorate General of GST Intelligence (DGGI), its intelligence wing. Each State also has its own GST department. Every registered person is assigned to one of these administrations for routine purposes, but either may investigate. This distinction matters when responding to a DGGI summons, because the CBIC’s administrative instructions bind central officers, while State GST officers are governed by the circulars and instructions issued by their respective State departments.

Overlap is policed by section 6(2)(b) of the CGST Act: where a proper officer under one law has initiated proceedings on a subject matter, an officer under the other law may not initiate proceedings on the same subject matter. In Armour Security (India) Ltd v. Commissioner, CGST, Delhi East Commissionerate, 2025 INSC 982 (decided 14 August 2025), the Supreme Court read “initiation of any proceedings” as the formal start of adjudication by a show cause notice. Summons, search and seizure are investigative steps and do not trigger the bar. “Same subject matter” means the same liability, arising from the same contravention, for which the same demand is sought.

The Court also laid down working guidelines. The taxpayer must still answer a summons, but should tell the second authority in writing that the matter is already under investigation elsewhere. The two authorities must then verify with each other and, if they conclude the subjects differ, say so in writing with reasons. A second show cause notice covering a liability already covered by the first is liable to be quashed, and a writ petition lies if the guidelines are ignored.

DGGI summons and GST defence: what section 70 does and does not allow

Section 70(1) of the CGST Act gives the proper officer the power of a civil court under the Code of Civil Procedure to summon any person whose attendance is considered necessary to give evidence or produce documents in an inquiry. A DGGI summons issued under this provision requires the person concerned to appear and cooperate with the inquiry. Section 70(1A), inserted by the Finance (No. 2) Act 2024 and in force from 1 November 2024, requires the person to appear in person or through an authorised representative, as the officer directs, to state the truth and produce the documents requested. Section 70(2) deems the inquiry to be a judicial proceeding for the purposes of the perjury and contempt provisions of the penal code.

Limits the CBIC has Placed on its Own Officers

The CBIC has issued two instructions that matter to anyone receiving a DGGI summons or another summons from a central GST officer:

• Instruction No. 03/2022-23 (GST-Investigation), 17 August 2022. A Superintendent needs prior written approval of a Deputy or Assistant Commissioner, with reasons recorded, before issuing summons. The summons should say whether the person is called as a witness or in some other capacity. Documents already on the GST portal should not be summoned. Senior management (chairpersons, managing directors, CEOs, CFOs) should not ordinarily be summoned in the first instance. Every summons must carry a Document Identification Number (DIN).
• Instruction No. 01/2023-24-GST (Inv.), 30 March 2024. For listed companies, public sector undertakings and government bodies, an official letter should normally be sent before any summons. Summons must state the specific nature of the inquiry rather than a bare reference to “GST evasion”. Investigations should ordinarily be concluded within a year, and certain sensitive categories need higher approval before they begin.

These instructions bind central officers administratively. A State GST officer is governed by that State’s own circulars, which should be checked.

Is the Person Summoned an Accused?

Not by reason of the summons alone. In Radhika Agarwal v. Union of India, 2025 INSC 272 (decided 27 February 2025), the Supreme Court held that a person summoned under section 70 is not, for that reason, an accused entitled to the protection of Article 20(3) against self-incrimination. The practical consequence is that the statement will be recorded and may be used later. That is why preparation matters.

The use of such statements is, however, constrained. Section 136 of the CGST Act makes a statement made and signed in response to a section 70 summons relevant in a prosecution only where the maker is dead, cannot be found or is otherwise unavailable, or is examined as a witness and the court decides the statement should be admitted in the interests of justice. And in Vinod Solanki v. Union of India, (2008) 16 SCC 537, the Supreme Court held, in the context of statements to enforcement officers, that the department bears the initial burden of showing a confession was voluntary, that a retracted confession needs substantial independent corroboration, and that the authority must deal with the retraction on the record.

Can a Lawyer Attend?

A person responding to a DGGI summons has no general right to have counsel sitting beside them during investigative questioning. However, in Radhika Agarwal v. Union of India, the Supreme Court endorsed, for GST as for Customs, the arrangement approved in Senior Intelligence Officer, DRI v. Jugal Kishore Samra, (2011) 12 SCC 362: an advocate may be present within sight but out of hearing. Where the circumstances justify it, that arrangement can be sought from the officer and, if refused, from the High Court.

Inspection, Search and Seizure under Section 67

Section 67 allows an officer of the rank of Joint Commissioner or above, who has reasons to believe that tax has been suppressed or goods or documents concealed, to authorise inspection and, where needed, search and seizure. Authorisation is issued in Form GST INS-01 and a seizure is recorded in Form GST INS-02. Seized goods may be released provisionally on a bond and security or on payment of the applicable tax, interest and penalty. If no notice is issued within six months of seizure, the goods must be returned, subject to one extension of up to six months for sufficient cause.

The most frequent complaint during searches is pressure to “deposit” tax on the spot. The CBIC’s Instruction No. 01/2022-23 (GST-Investigation) of 25 May 2022 states that there should be no recovery during search, inspection or investigation; voluntary payment through Form DRC-03 remains permissible. In Radhika Agarwal the Supreme Court went further: a payment made under force, coercion or threat of arrest is not a voluntary payment under section 74(5), the CBIC’s circulars bind its officers, and a person who paid under coercion may approach the court for a refund. A payment made to “settle” a search should therefore be a considered decision, recorded as voluntary only if it truly is.

Arrest under Section 69 after Radhika Agarwal

Arrest is available only for the more serious offences. Section 132 grades punishment by the amount involved: imprisonment of up to five years where it exceeds five crore rupees, up to three years between two and five crore, and up to one year between one and two crore (the last only for issuing invoices without supply). Following the Finance Act 2023, in force from 1 October 2023, the prosecution threshold is above two crore rupees except for fake invoicing. Offences under clauses (a) to (d) of section 132(1) above five crore are cognizable and non-bailable; the rest are non-cognizable and bailable. Prosecution needs the Commissioner’s prior sanction.

Section 69(1) allows the Commissioner, having reasons to believe that such an offence has been committed, to authorise arrest. Radhika Agarwal upheld the power but tied it down:

• The reasons to believe must be recorded in writing and rest on material, including material supporting the monetary computation. Suspicion is not enough, and arrest cannot be used to investigate whether the conditions for arrest exist.
• A completed assessment is not always a precondition, but the Commissioner must reach a degree of certainty, and the benefit of doubt goes to the person.
• The safeguards the Court set out for Customs arrests apply to GST: the D.K. Basu requirements, informing a nominated person, the grounds of arrest, and access to an advocate during interrogation though not throughout it.
• Anticipatory bail may be sought where arrest is apprehended.

The CBIC’s Instruction No. 02/2022-23 (GST-Investigation) of 17 August 2022 adds that arrest should not be made in cases turning on technical or interpretational disputes, and should follow only where the intent to evade is evident. Instruction No. 01/2025-GST of 13 January 2025 requires the grounds of arrest to be served in writing with the arrest memo, and acknowledged. Bail in economic offences raises its own questions about deposit conditions, covered in our note on the deposit-condition trap.

From Investigation to Show Cause Notice: Sections 73, 74 and 74A

An investigation ends either in closure or in a show cause notice. Before the notice, the officer may send an intimation in Form DRC-01A inviting payment or a reply. Since Notification 79/2020-Central Tax (15 October 2020) amended rule 142(1A), that intimation is discretionary, not mandatory. If one is received, it is the cheapest point at which to correct the department’s working.

The amnesty under section 128A, which waived interest and penalty on section 73 demands for FY 2017-18 to 2019-20 where the tax was paid by 31 March 2025, has closed for most taxpayers. It remains relevant only to a narrow class of re-determined cases.

A demand based on discrepancies in returns usually begins earlier, with a scrutiny notice in Form ASMT-10. How to answer one, and when a demand issued without it can be challenged, is covered in our spoke on replying to an ASMT-10 for excess ITC.

Suspension and Cancellation of Registration

Investigations are often accompanied by action on the registration itself. Under rule 21A(2), an officer who has reasons to believe that the registration is liable to cancellation under section 29 may suspend it pending the cancellation proceedings. Rule 21A(2A) allows suspension where the system flags significant differences between returns, with a notice in Form REG-31 giving thirty days to explain. While suspended, the person cannot make taxable supplies or obtain refunds. A suspension may be revoked at any stage of the cancellation proceedings. After cancellation, section 30 allows an application for revocation within the time the rules prescribe, which cannot be rejected without a hearing.

Suspension stops the business, so it is often the most urgent point in the whole case. A prompt, documented reply to the REG-31 or show cause notice for cancellation is usually faster than any litigation.

Can Employees and Advisers be Penalised? Section 122(1A)

Section 122(1A), in force from 1 January 2021, penalises any person who retains the benefit of certain transactions and at whose instance they are conducted. Departments have used it against employees, directors and consultants. In Shantanu Sanjay Hundekari v. Union of India (Bombay High Court, 28 March 2024), the High Court quashed penalty notices against salaried employees, holding that the provision reaches only a taxable person who retains the benefit. The Supreme Court dismissed the department’s challenge on 24 January 2025 but kept the question of law open.

The point is not settled. In Mukesh Kumar Garg v. Union of India, SLP (C) No. 18178 of 2025, the Supreme Court on 4 August 2025 granted leave on whether section 122(1) applies to a non-taxable person and whether section 122(1A) can apply to periods before 2021, staying recovery on a 25 per cent deposit. Until that appeal is decided, anyone relying on Hundekari should disclose that the question is pending before the Supreme Court.

Appeals: The First Appellate Authority, the GSTAT and the Writ Court

An adjudication order is appealed under section 107 to the first appellate authority within three months of communication, extendable by one month for sufficient cause, on a pre-deposit of the admitted amount and ten per cent of the disputed tax. A further appeal lies under section 112 to the Goods and Services Tax Appellate Tribunal, generally within three months, with a further pre-deposit of ten per cent of the remaining disputed tax, capped at twenty crore rupees. The Tribunal was formally launched on 24 September 2025. The special window for older orders closed on 31 July 2026; orders communicated on or after 1 May 2026 follow the ordinary three-month period.

Writ jurisdiction under Article 226 remains available where the action is without jurisdiction, in breach of natural justice or contrary to binding guidelines. Armour Security expressly recognises the writ remedy where its guidelines on parallel proceedings are not followed. But the High Court will ordinarily send a taxpayer to the statutory appeal where the dispute is one of facts or assessment.

Practical Defence When a DGGI Summons Arrives

When the Summons Arrives

• Check the DIN, the officer’s authority and the stated nature of the inquiry. Note whether the summons is addressed to the right person.
• If documents are on the GST portal, say so in writing rather than printing them.
• If a different authority is already investigating the same issue, tell the new authority in writing, attaching what you have, as Armour Security contemplates.
• If the date is impossible, seek a short adjournment in writing before the date. Do not simply stay away.

On the Day of the Statement

• Prepare a short chronology and the reconciliations that answer the obvious question. Answer factually and within your own knowledge.
• Read the recorded statement before signing. Ask for corrections to be made in the statement itself and obtain a copy.
• If a statement was obtained under pressure, retract it in writing promptly, with reasons, to the officer who recorded it.

During a Search

• Ask for the INS-01 authorisation and keep a copy of every panchnama and INS-02.
• Do not make any payment unless it is a considered, voluntary decision. If one is made, record the circumstances contemporaneously.

When Arrest is Apprehended

• Assess the amount honestly against the section 132 thresholds. Most GST cases are bailable.
• Where the offence alleged is non-bailable, consider anticipatory bail, and insist on written grounds of arrest and the Radhika Agarwal safeguards if arrest occurs.

The department’s side of the argument

Balance matters. The courts have consistently upheld the investigative powers themselves: Radhika Agarwal sustained both the summons and arrest provisions as ancillary to Parliament’s taxing power, and Armour Security refused to let a pending investigation be used to avoid a summons. Fake-invoice networks cause real revenue loss, and officers are entitled to insist on attendance, on truthful answers and on documents. A taxpayer who ignores summons, destroys records or makes inconsistent statements will find the safeguards of little use. The protections described here are safeguards against abuse. They do not answer the department’s case.

Questions Still Open

For the academic reader, three questions remain unresolved. The first is the reach of section 122 against non-taxable persons and before 2021, now before the Supreme Court in Mukesh Kumar Garg. The second is how the Armour Security test of “same subject matter” will apply to overlapping but not identical allegations, such as ineligible credit on one set of invoices and fake invoicing on another. The third is how far the administrative instructions on summons, which bind only central officers, will be enforced by writ against State officers who have issued none.

Frequently asked questions

Is it compulsory to appear in response to a DGGI summons?

Yes. A summons under section 70 of the CGST Act carries the powers of a civil court, and section 70(1A) requires the person to appear in person or through an authorised representative as directed. If the date is impossible, a written request for a short adjournment should be made before the date. Simply staying away weakens the defence and can invite prosecution.

Can I be arrested when I go to answer a GST summons?

Only for the serious offences listed in section 132, broadly where the amount exceeds two crore rupees (or one crore for fake invoicing), and only if the Commissioner has recorded written reasons to believe, based on material, that such an offence has been committed. In Radhika Agarwal v. Union of India, 2025 INSC 272, the Supreme Court held that suspicion is not enough, that the Customs-Act arrest safeguards apply, and that anticipatory bail may be sought.

Do I have to pay tax during a GST search?

No. CBIC Instruction No. 01/2022-23 (GST-Investigation) of 25 May 2022 states that there should be no recovery during search, inspection or investigation, though voluntary payment through Form DRC-03 is allowed. The Supreme Court in Radhika Agarwal held that payment made under coercion or threat of arrest is not voluntary and may be the subject of a refund claim.

Can the State GST and DGGI both investigate the same issue?

Both may investigate, because a summons or search is not the initiation of proceedings for the purposes of section 6(2)(b). But in Armour Security (India) Ltd v. Commissioner, CGST, 2025 INSC 982, the Supreme Court held that once one authority issues a show cause notice on a liability, the other cannot issue a second notice on the same liability arising from the same facts. The taxpayer should inform the second authority in writing.

What is section 74A of the CGST Act?

Section 74A, in force from 1 November 2024, is a single demand provision for tax periods from FY 2024-25 onwards. It covers both ordinary cases and cases of fraud or suppression, with a common time limit: the notice within 42 months of the due date of the annual return and the order within 12 months of the notice, extendable by up to six months. Penalty depends on whether fraud or suppression is established.

Where do I appeal against a GST demand order?

First to the appellate authority under section 107, within three months of communication (plus one month for sufficient cause), on a pre-deposit of the admitted amount and ten per cent of the disputed tax. A further appeal lies to the GST Appellate Tribunal under section 112, with a further pre-deposit of ten per cent of the remaining disputed tax. A writ petition is reserved for jurisdictional errors, breaches of natural justice or disregard of binding guidelines.

Sources

• Central Goods and Services Tax Act 2017, sections 6, 29, 30, 67, 69, 70, 73, 74, 74A, 107, 112, 122, 128A, 132 and 136 — CBIC tax information portal, e.g. section 70, section 69, section 132, section 136, section 112.
• Central Goods and Services Tax Rules 2017, rules 21A and 142 — rule 21A, rule 142; Notification 79/2020-Central Tax, 15 October 2020.
• Finance Act 2023 (amendments to section 132, in force 1 October 2023); Finance (No. 2) Act 2024 (sections 70(1A) and 74A, and amendments to sections 107 and 112).
• Radhika Agarwal v. Union of India, 2025 INSC 272, W.P. (Crl.) No. 336 of 2018, decided 27 February 2025 — Supreme Court of India.
• Armour Security (India) Ltd v. Commissioner, CGST, Delhi East Commissionerate, 2025 INSC 982, SLP (C) No. 6092 of 2025, decided 14 August 2025 — Supreme Court of India.
• Vinod Solanki v. Union of India, (2008) 16 SCC 537.
• Senior Intelligence Officer, DRI v. Jugal Kishore Samra, (2011) 12 SCC 362.
• Shantanu Sanjay Hundekari v. Union of India, Bombay High Court, W.P. (L) Nos. 30198, 30199, 30200 and 30241 of 2023, decided 28 March 2024; Union of India v. Shantanu Sanjay Hundekari, Supreme Court, SLP (C) Diary No. 55427 of 2024, order dated 24 January 2025.
• Mukesh Kumar Garg v. Union of India, Supreme Court, SLP (C) No. 18178 of 2025, order dated 4 August 2025 (leave granted).
• CBIC Instructions: No. 01/2022-23 (GST-Investigation), 25 May 2022; No. 02/2022-23 (GST-Investigation), 17 August 2022; No. 03/2022-23 (GST-Investigation), 17 August 2022; No. 01/2023-24-GST (Inv.), 30 March 2024; No. 01/2025-GST, 13 January 2025.
• CBIC Circular 238/32/2024-GST, 15 October 2024 (section 128A) — CBIC.
• Press Information Bureau, launch of the GST Appellate Tribunal, 24 September 2025 — PIB; GSTAT notification on due dates for filing appeals, 30 June 2026 — GSTAT.