Section 136 of the Central Goods and Services Tax Act, 2017 deals with the relevancy of statements recorded from a person during GST proceedings in response to a summons issued under Section 70.
The provision becomes important when a statement made and signed by a person during a GST inquiry is later sought to be relied upon in a prosecution for an offence under the CGST Act.
Section 136 does not say that every statement recorded during a GST investigation automatically becomes admissible evidence in a criminal prosecution. Instead, it specifies particular circumstances in which such a statement becomes relevant for proving the truth of the facts contained in it.
The provision is therefore closely connected with Section 70, which deals with summons, and with the prosecution provisions contained in Chapter XIX of the CGST Act. The current statutory text provides two situations in which the statement may be relevant: first, where the person who made the statement cannot be produced for specified reasons; and second, where that person is examined as a witness before the court and the court considers admission of the statement to be in the interest of justice.
What Is Section 136 of the CGST Act?
Section 136 is titled “Relevancy of statements under certain circumstances.”
The section provides that a statement made and signed by a person when appearing in response to a summons issued under Section 70, during an inquiry or proceedings under the CGST Act, shall be relevant for proving, in a prosecution for an offence under the Act, the truth of the facts contained in that statement when the statutory conditions are satisfied.
The provision contains two specific circumstances:
- The person who made the statement cannot be produced before the court for one of the reasons specified in Section 136(a); or
- The person is examined as a witness before the court and the court considers that the statement should be admitted in evidence in the interest of justice under Section 136(b).
Therefore, Section 136 is primarily an evidentiary provision connected with GST criminal prosecution.
Why Is Section 136 Important?
GST investigations can involve statements from:
- directors;
- partners;
- proprietors;
- employees;
- accountants;
- tax professionals;
- suppliers;
- customers;
- transporters;
- brokers;
- authorised representatives; and
- other persons having relevant knowledge.
Section 70 gives the proper officer the power to summon a person whose attendance is considered necessary to give evidence or produce documents or other things during an inquiry.
A statement recorded during such an inquiry may later become relevant in a prosecution under the CGST Act, but Section 136 sets out the circumstances in which it may be used for proving the truth of the facts contained in the statement.
Relationship Between Section 70 and Section 136
Understanding Section 70 is essential to understanding Section 136.
Section 70
Section 70 gives the proper officer power to summon any person whose attendance is considered necessary:
- to give evidence; or
- to produce a document or other thing,
in an inquiry under the CGST Act.
Section 136
Section 136 deals with the evidentiary relevance of a statement made and signed by a person when appearing in response to such a Section 70 summons.
In simple terms:
Section 70 → Power to summon
Section 136 → Relevancy of certain statements made in response to the summons
This connection makes Section 136 particularly important in GST investigation and prosecution matters.
What Type of Statement Is Covered by Section 136?
Section 136 specifically refers to a statement that is:
- made by a person;
- signed by that person;
- made on appearance in response to a summons under Section 70; and
- made during an inquiry or proceedings under the CGST Act.
The statement must therefore fall within the statutory circumstances described in Section 136.
A statement obtained outside the framework contemplated by the provision should not simply be treated as automatically covered by Section 136.
“Made and Signed” Statement
The wording of Section 136 specifically refers to a statement “made and signed” by the person.
This is significant because the provision is concerned with a recorded statement that can subsequently be relied upon in prosecution proceedings.
A person attending a GST inquiry should therefore carefully read any statement before signing it and ensure that the contents accurately reflect what was actually stated.
If there is an error or an inaccurate recording, the person should raise the issue through the appropriate legal process rather than signing an incorrect statement without clarification.
When Does Section 136 Make a Statement Relevant?
Section 136 identifies two circumstances.
Circumstance 1 – The Person Cannot Be Produced Before the Court
Under Section 136(a), the statement may be relevant when the person who made it:
- is dead;
- cannot be found;
- is incapable of giving evidence;
- is kept out of the way by the adverse party; or
- cannot be brought before the court without an amount of delay or expense that the court considers unreasonable.
These are specific circumstances.
The provision therefore does not say that the statement becomes relevant merely because the prosecution possesses it.
The statutory conditions must be considered.
When the Person Is Dead
The first situation is where the person who made the statement has died.
For example, suppose a person was summoned during a GST investigation and gave and signed a statement concerning a particular transaction.
If that person subsequently dies before the prosecution proceedings in which the statement is sought to be relied upon, Section 136(a) specifically recognises death as one of the circumstances in which the statement may be relevant.
The court must still apply the applicable evidentiary principles to the particular case.
When the Person Cannot Be Found
Section 136(a) also covers a situation where the person who made the statement cannot be found.
This could become relevant where the prosecution is unable to locate the person despite appropriate efforts.
Again, the statutory requirement is not simply that the person is inconvenient to produce. The circumstances must fall within the provision.
When the Person Is Incapable of Giving Evidence
Another circumstance is where the person who made the statement is incapable of giving evidence.
This may arise where circumstances prevent the person from being capable of providing evidence before the court.
Section 136 specifically recognises such a situation.
The relevance of the statement therefore does not depend solely on the physical availability of the person.
When the Person Is Kept Out of the Way
Section 136(a) also applies where the person who made the statement is kept out of the way by the adverse party.
This provision addresses a situation in which the person’s absence is connected with conduct by the adverse party.
The purpose is to prevent a party from defeating the evidentiary use of a relevant statement by ensuring that the person who made it is unavailable.
When Production Would Cause Unreasonable Delay or Expense
The fifth circumstance under Section 136(a) concerns a situation where the person’s presence cannot be obtained without an amount of delay or expense that the court considers unreasonable in the circumstances.
The important point is that the assessment belongs to the court.
The provision does not automatically treat every inconvenience, travel expense or delay as sufficient.
The court must consider the circumstances and determine whether the delay or expense involved in obtaining the person’s presence is unreasonable.
Circumstance 2 – Person Is Examined as a Witness
Section 136(b) provides another route.
The person who made the statement may be examined as a witness in the case before the court.
The court must then consider whether, having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice.
This is an important distinction.
The person is available and is actually examined as a witness, but the court still has to consider whether the earlier statement should be admitted in evidence in the interest of justice.
What Does “Interest of Justice” Mean Here?
Section 136 does not provide a mechanical formula for determining the interest of justice.
The court examines the circumstances of the particular case.
The provision therefore leaves the relevant evidentiary assessment to the court rather than making every signed Section 70 statement automatically admissible.
This is one reason why Section 136 should not be interpreted as creating an automatic rule that every investigation statement proves the facts stated in it.
Section 136 Is Relevant to Prosecution
An important phrase in Section 136 is:
“in any prosecution for an offence under this Act”
Therefore, the provision is specifically concerned with the use of the statement for proving facts in a criminal prosecution under the CGST Act.
It should not be confused with the ordinary use of statements during departmental investigation, adjudication, audit or tax determination proceedings.
The section addresses the evidentiary relevance of the statement in the context of prosecution for an offence under the CGST Act.
Section 136 Does Not Create a GST Tax Demand
Section 136 is not a charging or demand provision.
It does not itself:
- determine tax;
- create a tax liability;
- impose interest;
- impose a penalty;
- order recovery; or
- establish that an offence has been committed.
Instead, it concerns the evidentiary relevance of a particular type of statement in prosecution proceedings.
The underlying tax demand, penalty, recovery or criminal prosecution must be dealt with under the applicable provisions of the CGST Act and other relevant law.
Section 136 and Section 132
Section 132 contains the principal GST offence and prosecution provisions.
Certain conduct listed under Section 132 can result in criminal prosecution subject to the requirements of the Act.
Section 136 operates in that broader prosecution framework by addressing the relevance of statements recorded during Section 70 proceedings.
The relationship can be understood as:
Section 70 → Summons and inquiry
Section 132 → GST offences and punishment
Section 136 → Relevancy of specified statements in prosecution for GST offences
The existence of a Section 70 statement does not, by itself, establish that the person has committed an offence under Section 132.
Section 136 and Section 135
Section 135 deals with the presumption of culpable mental state in certain GST prosecutions.
Where a prosecution requires a culpable mental state, Section 135 provides for a statutory presumption, subject to the accused’s defence that the required mental state did not exist.
Section 136 deals with a different issue: the relevance of statements made and signed in response to a Section 70 summons.
Thus:
| Provision | Main subject |
|---|---|
| Section 135 | Presumption of culpable mental state |
| Section 136 | Relevancy of specified statements |
| Section 137 | Offences by companies |
These provisions appear together in Chapter XIX but address different evidentiary or prosecution issues.
Section 136 and Section 134
Section 134 deals with cognizance of offences under the CGST Act.
It provides, among other things, that no court shall take cognizance of an offence punishable under the CGST Act or Rules except with the previous sanction of the Commissioner, and that no court inferior to a Magistrate of the First Class shall try such an offence.
Section 136 does not deal with cognizance.
It deals specifically with when a statement may be relevant for proving facts in a prosecution.
Section 136 and Section 137
Section 137 deals with offences committed by companies and certain other entities.
It addresses when persons responsible for the conduct of a company’s business may be deemed guilty and also provides a defence where the person proves that the offence was committed without their knowledge or that they exercised due diligence.
Section 136, in contrast, concerns statements made in response to Section 70 summons.
The two provisions may arise in the same prosecution but serve different legal functions.
Importance of Section 70 Summons
Because Section 136 is directly connected with Section 70, it is important to understand how summons work.
Section 70(1) authorises the proper officer to summon any person whose attendance is considered necessary to:
- give evidence; or
- produce a document or other thing,
during an inquiry.
CBIC has issued specific guidelines on the use of summons, emphasising that the power should be exercised judiciously. The Board has also advised officers to consider whether a letter requesting information may be sufficient in circumstances where a summons is unnecessary.
Section 70(1A) and Authorised Representatives
The GST law was amended to expressly address attendance through an authorised representative in Section 70.
Section 70(1A) provides that persons summoned under Section 70(1) are bound to attend either personally or through an authorised representative, as the officer may direct, and are required to state the truth regarding matters on which they are examined or make statements and to produce required documents and other things. The amendment was part of the changes discussed by the 53rd GST Council and subsequently incorporated into the law.
This provision should be kept separate from Section 136.
Section 70(1A) concerns attendance and conduct in response to a summons, while Section 136 deals with the later evidentiary relevance of a statement in prosecution proceedings.
A Statement Under Section 136 Is Not Automatically Proof of Guilt
This is one of the most important practical points.
Section 136 states when a statement shall be relevant for the purpose of proving the truth of the facts which it contains.
It does not state that the existence of the statement automatically proves that:
- an offence occurred;
- the accused committed the offence;
- every fact in the statement is conclusively established; or
- conviction must follow.
The court remains responsible for assessing the evidence in the prosecution.
The provision identifies circumstances in which the statement can have evidentiary relevance.
Example – Statement by a Deceased Person
Suppose a company’s accountant receives a Section 70 summons during a GST investigation.
The accountant appears, gives a statement and signs it.
Later, a prosecution is initiated concerning the transactions discussed in the statement.
If the accountant has died and therefore cannot give evidence before the court, Section 136(a) specifically recognises death as one of the circumstances in which the statement may be relevant for proving the truth of the facts it contains.
The court would consider the statement according to the applicable evidentiary principles.
Example – Person Cannot Be Found
Suppose a transporter gives and signs a statement during a GST inquiry concerning movement of goods.
Later, prosecution is initiated.
If the transporter cannot be found, and the circumstances satisfy Section 136(a), the statement may become relevant for proving the facts contained in it.
The provision does not require the statement to be treated as automatically conclusive evidence.
Example – Person Available as Witness
Suppose a person who gave a Section 70 statement is available and is examined as a witness before the court.
The court may consider the earlier statement under Section 136(b) if it is of the opinion that admitting the statement is in the interest of justice.
Here, the person’s examination before the court is specifically part of the statutory condition.
Example – Statement Concerning Fake Invoices
Suppose a person involved in a business transaction gives a signed statement during a GST inquiry concerning the creation or use of invoices.
If a prosecution is later launched for an offence under the CGST Act, the statement may become relevant under Section 136 when the conditions specified in the section are satisfied.
The statement may form part of the evidence considered by the court along with other material.
Example – Statement Concerning Input Tax Credit
Suppose a person gives a signed statement during a Section 70 inquiry concerning transactions that allegedly resulted in wrongful input tax credit.
If a prosecution is subsequently launched, Section 136 may become relevant if the statutory conditions for using the statement are satisfied.
Again, the statement is evidence whose relevance and weight are considered in the prosecution; Section 136 itself does not determine guilt.
Importance of Reading a Statement Before Signing
Because Section 136 specifically concerns a statement that has been made and signed, a person appearing under summons should carefully review the statement before signing it.
The person should check whether:
- names are correctly recorded;
- dates are correct;
- transaction details are accurate;
- amounts are correctly mentioned;
- documents referred to are correctly identified;
- answers accurately reflect the questions asked; and
- any clarification given during examination has been properly recorded.
If something is incorrect, it should be brought to the attention of the officer before the statement is signed, subject to the applicable legal procedure.
Keep Copies of Documents and Statements
A person appearing in a GST inquiry should maintain copies of:
- the summons;
- documents submitted;
- written replies;
- statements signed;
- supporting records; and
- other relevant correspondence.
Maintaining an organised record can become important if the matter subsequently proceeds to adjudication or prosecution.
Section 136 and the Role of the Court
Section 136 expressly refers to the court.
In the first category under Section 136(a), the court considers whether the person’s presence cannot reasonably be obtained because of the circumstances identified in the provision.
In the second category under Section 136(b), the court determines whether the statement should be admitted in evidence in the interest of justice.
Therefore, Section 136 involves judicial assessment rather than automatic acceptance of every statement recorded during GST investigation.
Section 136 and Evidentiary Weight
There is a distinction between:
- whether a statement is relevant; and
- what weight the court ultimately gives that statement.
Section 136 addresses the circumstances in which the statement is relevant for proving the truth of facts contained in it.
The court may consider the statement along with other evidence and circumstances of the case.
Therefore, taxpayers and businesses should not interpret Section 136 as creating an automatic rule of conviction based solely on a statement.
Section 136 and Retraction of a Statement
A person may, in appropriate circumstances, dispute the accuracy or voluntariness of a statement through the applicable legal process.
Section 136 itself does not establish a separate statutory procedure for “retraction” of statements.
Where a person believes that a statement contains inaccuracies, was incorrectly recorded or was otherwise improperly obtained, the issue should be addressed through appropriate legal proceedings and evidence.
The precise legal consequences will depend on the circumstances and applicable law.
Section 136 and Self-Incrimination
Section 136 itself does not create a general rule that a person is guilty merely because a statement was recorded under summons.
Questions concerning constitutional protections, self-incrimination, voluntariness, evidentiary admissibility and the manner in which a statement was obtained may involve provisions beyond Section 136 and must be considered in the context of the particular case.
Therefore, Section 136 should be read as a specific statutory provision concerning the relevancy of statements under certain circumstances, rather than as a complete code governing every issue relating to statements.
Section 136 and Departmental Adjudication
It is also important to distinguish prosecution from departmental adjudication.
GST authorities may use statements and other evidence during tax proceedings, subject to the applicable legal framework.
Section 136 specifically addresses the use of the described statements in prosecution for an offence under the CGST Act.
Therefore, the fact that Section 136 applies to prosecution does not mean that the same statement can never be relevant in any departmental proceeding. The evidentiary rules applicable to the particular proceeding must be considered separately.
Section 136 and Natural Justice
Although Section 136 itself focuses on evidentiary relevance, the overall legal process in a GST matter may involve principles of procedural fairness.
A taxpayer or person affected by GST proceedings should have an opportunity to respond to allegations in the appropriate proceedings.
Where a statement is relied upon in adjudication or prosecution, its relevance, authenticity, context and evidentiary value may become important issues depending on the case.
Practical Compliance Checklist for Persons Receiving GST Summons
A person who receives a summons under Section 70 should take the process seriously.
1. Read the Summons Carefully
Understand:
- who issued it;
- the date and time;
- the place of appearance;
- the purpose;
- the documents required; and
- whether personal attendance or attendance through an authorised representative is directed.
2. Collect Relevant Records
Prepare the documents requested in the summons.
These may include:
- invoices;
- purchase records;
- sales records;
- e-way bills;
- agreements;
- bank records;
- GST returns;
- accounting records; and
- correspondence.
3. Understand the Transaction
Before appearing, review the relevant transactions and supporting documents so that factual answers can be given accurately.
4. Do Not Guess
If a person does not know an answer, it is better to state that the information is not known or requires verification rather than providing an inaccurate answer.
5. Review the Statement
If a statement is recorded, carefully read it before signing and ensure that it accurately reflects the answers given.
6. Preserve Copies
Maintain copies of the summons, statement and documents submitted.
7. Obtain Professional Advice Where Appropriate
Complex investigation or prosecution matters can have significant consequences. A taxpayer or summoned person may consider obtaining advice from a qualified tax professional or lawyer based on the facts of the case.
Section 136 – Key Differences From Related Provisions
| Section | Subject | Main purpose |
|---|---|---|
| Section 70 | Summons | Obtaining evidence, documents or other things during inquiry |
| Section 132 | Offences and punishment | Specifies GST offences and prosecution consequences |
| Section 134 | Cognizance of offences | Conditions for court taking cognizance |
| Section 135 | Culpable mental state | Presumption concerning required mental state |
| Section 136 | Statements | Relevancy of specified statements in prosecution |
| Section 137 | Offences by companies | Liability of companies and responsible persons |
| Section 138 | Compounding | Compounding of specified offences |
The provisions work together within the GST investigation and prosecution framework but address different legal questions.
Section 136 – Important Points to Remember
The major points of Section 136 can be summarised as follows:
- Section 136 is titled “Relevancy of statements under certain circumstances.”
- It relates to statements made during GST inquiries or proceedings.
- The statement must be made and signed by the person.
- The person must have appeared in response to a summons issued under Section 70.
- The statement must have been made during an inquiry or proceedings under the CGST Act.
- Section 136 concerns relevance in a prosecution for an offence under the CGST Act.
- The statement may be relevant when the person who made it is dead.
- It may be relevant when the person cannot be found.
- It may be relevant when the person is incapable of giving evidence.
- It may be relevant when the person is kept out of the way by the adverse party.
- It may also be relevant when the person’s presence cannot be obtained without unreasonable delay or expense as determined by the court.
- A second situation arises when the person is examined as a witness before the court.
- In that situation, the court must consider whether the statement should be admitted in evidence in the interest of justice.
- Section 136 does not state that every Section 70 statement is automatically admissible in every prosecution.
- It does not itself establish that the accused is guilty of an offence.
- It does not itself determine tax liability, interest or penalty.
- Section 136 should be read with Section 70 because Section 136 specifically concerns statements made in response to Section 70 summons.
- Section 70 gives the proper officer power to summon persons to give evidence or produce documents or other things.
- CBIC has issued guidelines stating that the power to issue summons should be exercised judiciously.
- A person receiving a summons should carefully review and accurately respond to the matters covered by the inquiry.
👉 Read More → Section 136 – Relevancy of statements under certain circumstances
Conclusion
Section 136 of the CGST Act is an important evidentiary provision dealing with the relevancy of statements made and signed by persons appearing in response to Section 70 summons.
The section does not make every statement recorded during a GST investigation automatically admissible for every purpose. Instead, it specifically provides circumstances in which such a statement becomes relevant for proving, in a prosecution for an offence under the CGST Act, the truth of the facts contained in it.
The first category covers situations where the person who made the statement cannot be produced before the court because the person is dead, cannot be found, is incapable of giving evidence, is kept out of the way by the adverse party, or cannot be produced without unreasonable delay or expense as determined by the court.
The second category applies where the person who made the statement is examined as a witness before the court and the court considers that admitting the statement in evidence is in the interest of justice.
Section 136 should therefore be understood together with Section 70, which provides the statutory power to summon persons during GST inquiries. CBIC has separately instructed officers that summons should be issued judiciously and that, where appropriate, a simple request for information may be considered instead of resorting to summons.
For taxpayers, directors, employees and other persons appearing under GST summons, the practical importance of Section 136 is that a signed statement given during the inquiry may have evidentiary relevance in subsequent prosecution when the statutory conditions are satisfied. This makes accuracy in statements, careful review of recorded answers and proper preservation of relevant documents particularly important.
Ultimately, Section 136 does not itself decide whether a GST offence has been committed. It establishes a specific rule concerning the relevance of certain statements as evidence in prosecution proceedings, while the court determines the evidentiary issues and the prosecution must establish the offence in accordance with the applicable law.
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