Tax in India

The Commissioner of CGST, by order, can authorize any CGST officer to arrest a person, if he has reasons to believe that such person has committed an offence specified in clause (a) or (b) or (c) or (d) of section 132(1) which is punishable under clause (i) or (ii) of section 132(1) or section 132(2) of the Act. This essentially means that a person can be arrested only when the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds ` 2 Crores or where a person has earlier been convicted for an offence under section 132 of the CGST Act.

(ICAI FAQ PUBLICATIONS 06-09-2017 POWER TO ARREST: FAQ NO. 17)

Non-cognizable offence means an offence in respect of which a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiated without the permission of a Court.

(ICAI FAQ PUBLICATIONS 06-09-2017 POWER TO ARREST: FAQ NO. 16)

Generally, cognizable offence means serious category of offences in respect of which a police officer has the authority to make an arrest without a warrant and to start an investigation with or without the permission of a Court.

(ICAI FAQ PUBLICATIONS 06-09-2017 POWER TO ARREST: FAQ NO. 15)

Yes. The person in charge of a conveyance carrying any consignment of goods of value exceeding a specified amount to carry with him such documents and devices as may be prescribed by the Government. On interception of the conveyance, the person in charge shall produce the prescribed documents and devices for verification and allow inspection of goods by the proper officer.

(ICAI FAQ PUBLICATIONS 06-09-2017 POWER OF INSPECTION, SEARCH AND SEIZURE: FAQ NO. 14)

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)