In an instruction issued to senior field officers, CBIC said that the tax authority has noticed that in certain cases, summonses have been issued by field officers to top company officials in a routine manner to call for documents and evidence. The indirect tax authority also flagged that summons have been issued to get records available on the goods and services tax (GST) portal.

The move comes after professionals, and industry representatives raised concerns over instances of issuing summons to senior company leaders. CBIC also told officers in a separate set of guidelines that arrests should not be made in cases involving a difference of opinion on the interpretation of the law.

While issuing of summons is one of the instruments with the department to obtain information, documents or statements to find out about tax evasion, it needs to be ensured that the exercise of such power is to be done "judiciously and with consideration," the instruction said. It also told officers to explore other ways of getting information, such as sending a letter. The instruction comes as a fresh set of guidelines in the GST regime.

"Senior management officials such as CMD/MD/CEO/CFO/similar officers of any company or a public sector unit should not generally be issued summons in the first instance. They should be summoned when there are clear indications in the investigation of their involvement in the decision-making process which led to a loss of revenue," read the instructions.

Summons by superintendents should be issued after obtaining prior written permission from an officer, not below the rank of deputy commissioner or assistant commissioner, with reasons to be recorded in writing, CBIC said.

Tax experts said that the instructions set the important principles to be kept in mind by department officers while issuing summons. That includes avoiding repeated summons without ensuring the one issued earlier was served to the person.

According to Saurabh Agarwal, a tax partner at EY, CBIC has taken cognizance of the industry's request and has instructed the department to exercise the power to issue summons judiciously and has fixed a clear approval matrix in this regard.

"The specific clarification on non-issuance of summons to senior management in taxpayer business till there are genuine reasons to believe that there has been their involvement in decision making leading to loss of revenue would help reduce the undue hardships faced by the taxpayer," Agarwal said.

Separately, CBIC also issued guidelines that officers have to follow while exercising their power of arrest under the Central GST Act. The tax authority pointed out an observation by the Supreme Court in a case last year that personal liberty is an important aspect of the constitutional mandate and that merely because an arrest can be made because it is lawful does not mandate that the arrest must be made.

"Since the arrest impinges on the personal liberty of an individual, the power to arrest must be exercised carefully. The arrest should not be made in a routine and mechanical manner," said the guidelines.