Introduction - INSPECTION, SEARCH & SEIZURE - GST Ready Reckoner - GST

Introduction - INSPECTION, SEARCH, SEIZURE AND ARREST Search As per law dictionary and as noted in different judicial pronouncements, the term search , in simple language, denotes an action of a government machinery to go, look through or examine carefully a place, area, person, object etc. in order to find something concealed or for the purpose of discovering evidence of a crime. The search of a person or vehicle or premises etc. can only be done under proper and valid authority of law. Seizure The term seizure has not been specifically defined in the GST Law. In Law Lexicon Dictionary, 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. Search Seizure The provisions of search and seizure also provides enough safeguards and the GST Law stipulates that search of any place of business etc. can be carried out only under authorisation from an officer of the rank of Joint Commissioner and if he has a reason to believe that the person concerned has done at least one of the following:- (a) Goods liable to confiscation or any documents /books/record/things, which may be useful for or relevant to any proceedings, are secreted in any place then all such places can be searched; (b) All such goods/documents/books/record/ things may be seized, however, if it is not practicable to seize any such goods then the same may be detained. The person from whom these are seized shall be entitled to take copies/ extracts of seized records; (c) The seized documents/books/things shall be retained only till the time the same are required for examination /enquiry/proceedings and if these are not relied on for the case then the same shall be returned within 30 days from the issuance of show cause notice; (d) The seized goods shall be provisionally released on execution of bond and furnishing a security or on payment of applicable tax, interest and penalty; (e) In case of seizure of goods, a notice has to be issued within six months, if no notice is issued within a period of six months then all such goods shall be returned. However, this period of six months can be extended by Commissioner for another six months on sufficient cause; (f) An inventory of the seized goods/documents/ records is required to be made by the officer and the person, from whom the same are seized, shall be given a copy of the same. (g) To ensure that the provisions for search and seizure are implemented in a proper and transparent manner, the Act stipulates that the searches and seizures shall be carried out in accordance with the provisions of Criminal Procedure Code, 1973. It ensures that any search or seizure should be made in the presence of two or more independent witnesses, a record of entire proceedings is made and forwarded to the Commissioner forthwith. Inspection Inspection is a new provision under the CGST / SGST Act . 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. As discussed above the 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 actions : (a) Suppression of any transaction relating to supply of goods or services or stock in hand; (b) Claimed excess input tax credit; (c) Contravention of any provisions of the Act or the Rules to evade tax; (d) Transporting or keeping goods which escaped payment of tax or manipulating accounts or stocks which may cause evasion of tax; Inspection in movement Inspection can also be done of the conveyance, carrying a consignment of value exceeding specified limit. The person in charge of the conveyance has to produce documents / devices for verification and allow inspection. Inspection during transit can be done even without authorisation of Joint Commissioner. (a) Any consignment, value of which is exceeding ₹ 50,000/-, may be stopped at any place for verification of the documents /devices prescribed for movement of such consignments. (b) If on verification of the consignment, during transit, it is found that the goods were removed without prescribed document or the same are being supplied in contravention of any provisions of the Act then the same can be detained or seized and may be subjected to penalties as prescribed. (c) To ensure transparency and minimise hardships to the trade the law provides that if during verification, in transit, a consignment is held up beyond 30 minutes the transporter can feed details on the portal. This will ensure accountability and transparency for all such verifications. Moreover, for verification during movement of consignment will also be done through Digital interface and therefore the physical intervention will be minimum and as has already been mentioned that in case of a delay beyond 30 minutes the transporter can feed the details on the portal.