Statements recorded during investigation and their evidentiary value
A statement is not evidence of the truth of its contents until it survives cross examination.
A statement recorded under Section 70 is evidence in the proceedings, and Section 136 provides for the circumstances in which a statement made and signed before an officer is relevant for the purpose of proving the truth of the facts it contains, including where the person is examined as a witness and the court or authority is of the opinion that it should be admitted in the interests of justice. A statement relied on against a taxpayer must be tested, and denial of cross examination on a statement forming the substratum of the order vitiates it.
The framework
Section 136 makes a statement relevant in the circumstances specified, including where the maker is dead, cannot be found, is incapable of giving evidence, or is kept out of the way, and otherwise where the maker is examined as a witness.
The practical consequence is that a third party statement cannot simply be quoted in an order against you. The maker must be produced for cross examination if the statement is to carry weight.
Andaman Timber Industries holds that denial of cross examination of witnesses whose statements form the basis of the order is a serious flaw that renders the order unsustainable.
The request must be made in writing, before the adjudication closes, identifying the statement and the person.
Retraction
A retraction is available but its weight depends on its timing and its content. A retraction filed the next day, setting out the circumstances with specifics, is persuasive. A retraction filed six months later, in general terms, is not.
The retraction should state what was said, why it was inaccurate, and what the correct position is, with documents.
Where the statement was recorded at unreasonable hours, the times should be recorded, and the recent authority on the conduct of investigation supports the objection.
A retraction does not remove the statement from the record; it puts the department to proof, which is its purpose.
Managing statements as a company
Brief anyone likely to be summoned: state facts, not characterisations; do not give figures from memory; read and correct before signing; ask for a copy.
Where a junior employee has given a statement about matters beyond their knowledge, that is a ground rather than a disaster; the reply should identify what the employee could not have known.
Collect all statements referred to in the notice by a written request for the relied upon documents.
Build the documentary answer to each statement; a statement is answered by records, not by another statement.
Authorities relied on
Denial of cross examination of witnesses whose statements form the basis of the order renders the order unsustainable.
The conduct of investigation, including the recording of statements and the pressure applied for payment, is subject to the criminal procedure safeguards.
What to do on Monday
Brief every likely witness before an investigation begins, not after.
Request cross examination in writing, identifying the statement and the person, before adjudication closes.
File any retraction immediately with specifics and documents.
Answer each statement with records rather than assertions.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Can an order rest on a supplier's statement alone?
Not where cross examination has been denied. Request it in writing and preserve the refusal.
Is a retraction useful?
Its value depends on timing and specificity. File it immediately, with the circumstances and the correct position.
Can we get copies of statements relied on?
Request them as relied upon documents. An order resting on material not supplied is vulnerable.
What if a junior employee gave a wrong statement?
Identify in the reply what the employee could not have known, and answer the substance with records.
Are statements admissible in the prosecution?
Their admissibility in a criminal proceeding is governed by the criminal law, and the safeguards are stricter. Take separate advice.
In this cluster
- GST enforcement: search, seizure, summons, arrest and attachment in one map
- Section 70 summons: your rights, your obligations and your record
- Section 67 search and seizure: the conditions that must be satisfied
- Section 69 arrest under GST: when it is legal and when it is not
- Section 132 prosecution: offences, thresholds and compounding
- Radha Krishan Industries: provisional attachment is draconian, and the conditions are strict
- Radhika Agarwal: the Supreme Court's 2025 safeguards on GST and customs arrest
- Bank account attachment: getting it lifted fast
- Anticipatory bail and regular bail in GST offences
- Coerced DRC-03 payments during search: recovery and refund
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.