Category: Inspection, Search and seizure under GST

Section 67(10) prescribes that search must be carried out in accordance with the provisions of Code of Criminal Procedure, 1973.

(ICAI FAQ PUBLICATIONS 06-09-2017 POWER OF INSPECTION, SEARCH AND SEIZURE: FAQ NO. 13)

The following are the safeguards provided in section 67 in respect of search and seizure:
(a) Seized goods or documents should not be retained beyond the period necessary for their examination.
(b) Photocopies of the documents can be taken by the person from whose custody documents are seized.
(c) In respect of seized goods, if a notice is not issued within 6 months of its seizure, such goods shall be returned to the person from whose possession it was seized. This period of six months can be extended on justified grounds up to a further period not exceeding 6 months.
(d) An inventory of seized goods shall be prepared by the seizing officer.
(e) Certain notified categories of goods such as perishable or hazardous nature,
depreciation in value of the goods with the passage of time etc. can be disposed
of immediately after seizure. However, if the taxable person pays an amount
equivalent to the market price of such goods or things or the amount of tax, interest and penalty that is or may become payable, whichever is lower, on proof of such payment, the Proper officer shall order for release such goods or things, in FORM GST INS-05.
(f) Provision of Code of Criminal Procedure 1973 relating to search and seizure shall apply.

(ICAI FAQ PUBLICATIONS 06-09-2017 POWER OF INSPECTION, SEARCH AND SEIZURE: FAQ NO. 12)

Yes. The seized goods can be released on provisional basis upon execution of a bond for the value of goods in FORM GST INS-04 and furnishing of security in the form of a bank guarantee equivalent to the amount of applicable tax, interest and penalty payable, or on payment of applicable tax, interest and penalty.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.11)

Where it is not practicable to seize any goods, the Proper officer may serve a prohibitory order in FORM GST INS-03 on the owner or the custodian of the goods that he shall not remove, part with or otherwise deal with the goods except with the prior permission

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.10)

1. An officer carrying out a search has the power to search for and seize goods (which are liable to confiscation) and documents, books or things (relevant for any proceedings under the Act) from the premises searched.
2. During search, the officer has the power to seal or break open the door of the any premises authorized to be searched if access to the same is denied.
3. Similarly, while carrying out search within the premises, he can break open any almirah, electronic devices, box, receptacle if access to such almirah, devices, box, receptacle is denied and in which any goods, account, registers
   or documents are suspected to be concealed.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.9)

1. Reason to believe is to have knowledge of facts which, although not amounting to direct knowledge, would cause a reasonable person, knowing the same facts, to reasonably conclude the same thing.
2. As per Section 26 of the IPC, 1860, “A person is said to have ‘reason to believe’ a thing, if he has sufficient cause to believe that thing but not otherwise.”
3. ‘Reason to believe’ contemplates an objective determination based on intelligent care and evaluation as distinguished from a purely subjective consideration.
4. It has to be and must be that of an honest and reasonable person based on relevant material and circumstances.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.7)

1. Proper officer not below the rank of Joint Commissioner can himself or authorize any other CGST officer in FORM GST INS-01 (Chapter-XVII-Inspection, Search and Seizure of the CGST Rules) to carry out search and seize goods, documents, books or things.
2. Such authorization can be given only where the proper officer has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted / hidden in any place.
3. Where any goods, documents, books or things are liable for seizure, the proper officer or an authorized officer shall make an order of seizure in FORM GST INS-02.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.6)

CGST officer authorized by the proper officer not below the rank of Joint Commissioner shall have the powers to carry out inspection of any of the following places / premises:
(a) any place of business of a taxable person;
(b) any place of business of a person engaged in the business of transporting goods;
(c) any place of business of an owner or an operator of a warehouse or godown;
(d) any other place

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.5)

As per Section 67(1), Inspection can be carried out by any officer of Central tax only upon a written authorization in Form GST INS-01 given by a proper  officer not below the rank of Joint Commissioner. Such proper officer can give such authorization only if he has reasons to believe that the person concerned has–
(a) suppressed any transaction of supply;
(b) suppressed stock of goods in hand;
(c) claimed excess input tax credit;
(d) contravened any provisions of this Act or rules made there under to evade tax;
(e) a transporter or an owner or operator of a warehouse or godown or any  place, has kept goods which have escaped payment of tax or has kept his
accounts or goods in a manner that is likely to cause evasion of tax.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO.4)

It is a softer provision than search to enable officers to access any place of business of a taxable person and also any place of business of a person engaged in transporting goods or who is an owner or an operator of a warehouse or godown.

(ICAI FAQ PUBLICATIONS : – 06-09-2017 -INSPECTION, SEARCH, SEIZURE AND ARREST  : FAQ NO. 2)