67.1.1 Circumstances for carrying out inspection

Question-1 [ICAI-F-Ch18-Q3]

Who can order for carrying out ‘inspection’ and under what circumstances?

Answer

As per section 67, inspection can be carried out by an officer of CGST/SGST only upon a written authorization given by an officer of the rank of Joint Commissioner or above. A Joint Commissioner or an officer higher in rank can give such authorization only if he has reasons to believe that the person concerned has done one of the following:

i. suppressed any transaction of supply;

ii. suppressed stock of goods in hand;

iii. claimed excess input tax credit;

iv. contravened any provision of the CGST Act to evade tax;

v. a transporter or an owner/operator of a warehouse/godown/any other 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.

67.1.2 Authorisation for Search and Seizure

Question-1 [ICAI-F-Ch18-Q4]

Who can order for search and seizure under the provisions of the CGST Act?

Answer

An officer of the rank of Joint Commissioner or above can authorize an officer in writing to carry out search and seize goods, documents, books or things.

Such authorization can be given only where the Joint Commissioner/an officer above his rank has reasons to believe that any goods liable to confiscation or any documents or books or things relevant for any proceedings are hidden in any place. The Joint Commissioner/an officer above his rank can himself search and seize such goods, documents or books or things.

67.2.3 Authorised officer has power to seal or break open the door of premises or almirah etc

Question-1 [ICAI-F-Ch18-Q5]

Describe the powers that can be exercised by an officer during a valid search.

Answer

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 CGST Act) from the premises searched. During search, the officer has the power to break open the door of the premises authorized to be searched if access to the same is denied. Similarly, while carrying out search within the premises, he can break open any almirah or box if access to such almirah or box is denied and in which any goods, account, registers or documents are suspected to be concealed. He can also seal the premises if access to it denied.

67.5 Miscellaneous Question & Answer

Question-1 [ICAI-F-M22-6(b)-5]

List the safeguards provided in section 67 of the CGST Act, 2017 in respect of the power of search or seizure.

Answer

The safeguards provided in section 67 of the CGST Act, 2017 in respect of the power of search or seizure are as under:

(i) Seized documents/goods/things should not be retained beyond the period necessary for their examination.

(iii) Photocopies/extracts of the documents can be taken by the person from whose custody documents are seized.

(iv) In case of seized goods, where a notice is not issued within 6 months [extendible for further 6 months] of their seizure, goods shall be returned to the person from whose possession they were seized.

(v) An inventory of seized goods is required to be made by the seizing officer.

(vi) Certain specified categories of goods such as perishable, hazardous etc. can be disposed of immediately after seizure.

(vii) Searches and seizures shall be carried out in accordance with the provisions of Code of Criminal Procedure. Instead of sending copies of any record made in the course of search to the nearest magistrate, it has to be sent to the Principal Commissioner /Commissioner of CGST.