pri Investigation, Search, Seizure & Arrest under CGST Act & Rules Investigation, Search, Seizure & Arrest under CGST Act & Rules

Since GST applicable, it has legal procedures too, for Inspection, Search, Seizure & Arrest which, we should first consider the legal provision for not following the provisions contain under CGST Act or rules made thereunder.

So get ready to give a glance for not following provision stated in the GST Act or rules made there under & face the consequences simultaneously :

The legal provision for going out of the provisions contained under CGST Act or rules made thereunder there will be involvement of an officer not below the range of  JOINT COMMISSIONER or any other officer of the central tax authorise in writing for such provision.

Section 67 : Power of Inspection, Search, Seizure & Arrest

This Section empower Proper Officer to inspect the place of business and to search & seize goods/ documents or records. The term “Seizure” is defined as the act of taking possession of property by an officer under legal process. It generally implies taking possession forcibly contrary to the wishes of the owner of the property or who has the possession and who was unwilling to part with the possession.

(1) Where the proper officer not below the rank of Joint Commissioner has a reason to believe that

(a) A taxable person has suppressed any transaction relating to supply of goods or services or both or stock of goods in hands, or has claimed ITC in excess of the entitlement under this actor has indulged in any contravention of any of the provision of this act or rules made thereunder to evade the tax under this act; or

(b) Any person engaged in transporting of any goods or an owner or operator of warehouse or godown or any other place is keeping goods which has escaped the payment of tax or has kept his accounts or goods in such manner as is likely to cause evasion of tax payable under this act, he may authorize in writing any other officer of the central tax to inspect any place of business of the taxable person or the person engaged in the business of transporting of the goods or the owner or operator of  warehouse or godown or any other place.

[It has basically considered “Reason to Belief” that where there is any reason to believe or to have knowledge of facts which although not amounting to direct knowledge, would cause a reasonable person, knowing the same facts, to reasonable conclude the same thing.]

(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub section (1) or otherwise (i.e., on basis of intelligence), has reason 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 proceeding under this act, are secreted in any place.

He may authorize in writing any other officer of central tax to search & seize or may himself search and seize goods, documents or books or things.

Provided that where it is not practicable to seize any such goods, the proper officer or any other officer authorized by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with or otherwise deal with the goods except with previous permission of such officer.

Provided further that the document or books or things so seized shall be detained by such officer only for so long as may be necessary for their examination and for any inquiry or proceeding under this act.

(3) The document, books or things referred to in sub section (2), or any other document, books, things produced by a taxable person or any other person which have not been relied upon for the issue of notice under this act or rules made thereunder shall be returned to such person within a period not exceeding THIRTY DAYS from date of issue of said notice.

(4) The officer authorized under sub section (2) should have the power to seal or break open the door of any premises or to break open any almirah, electronic device , box, receptacle in which any goods, accounts, register or documents of the person are suspected to be concealed, where access to such premises, electronic device, box or receptacle is denied.

(5) The person from whose custody any document are seized under sub section (2) shall be entitled to make copies thereof or take extract therefrom in the presence of the authorized officer at such place and time as such officer may indicate in this behalf.

Except where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation.

(6) The goods so seized under sub section (2) shall be released on a provisional basis, upon execution of a BOND and furnishing of a SECURITY in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be.

Where in short  Provisional release Upon submission of BOND

BOND : Covering the value of (Security shall also be furnished) GOODS. Form GST INS -04, Rule- 140(1)

Upon payment of related dues

This is payment under protest, (applicable tax, interest and penalty made to secure release of seized shall be paid) goods.

(7) Where any GOODS are seized under sub section (2) & no notice in respect thereof is given within SIX MONTHS of the seizure of the goods shall be returned to the person from whose possession they were seized.

Provided that the period of SIX MONTHS may, on sufficient cause being shown, be extended by the PROPER OFFICER for a further period not exceeding SIX MONTHS.

(8) The government may, having regarding to the perishable or hazardous nature of any goods, depreciation in the value of any goods with the passage of time, constraints of storage space for the goods or any other relevant consideration, by notification, specify the goods or class of goods, which shall as soon as may be after its seizure under sub section (2), be disposal of by proper officer in such manner as may be prescribed.

(9) Where any goods, being goods specified under sub section (8) have been seized by a proper officer, or any other officer authorized by him under sub section (2), he shall prepare an inventory of such goods in such manner as may be prescribed.

(10) The provision of code of criminal procedure 1973, relating to search & seizure, shall so far as may be, apply to search & seizure. Under this section subject to the modification that sub section (5) of section 165 of the said CODE shall have effect as if the word “ magistrate” wherever it occurs the word “commissioner” were substituted.

(11) Where the proper officer has a reason to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for the reason to be recorded in writing, seize the accounts, register or document of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceeding under this act or rules made thereunder for prosecution.

(12) The commissioner or an officer authorized by him may cause purchase of any goods or service or both by any person authorized by him from the business premises of any taxable person, to check the issue of tax invoice or bill of supply by such taxable person and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier.

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Name: Pooja
Qualification: Student - CA/CS/CMA
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Location: New Delhi, New Delhi, IN
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July 2021