PANCHNAMA - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

4. PANCHNAMA 4.1. Panchnama (Mahazar) is the primary document for establishing an offence under the CGST Act, 2017 as it has a very strong evidentiary value. It is the record of events right from the commencement of search to the conclusion of the search and includes stock taking as well as the entire record of the search proceedings. The manner of drawing the Panchnama should be such that it should be a mirror image of the proceedings on the spot. 4.2. Panchnama is a document where the record of proceedings of the search with regard to the recovery of goods, documents, things, etc. are detailed. The Panchnama is required to be signed by the person in whose presence the search was conducted as also by the independent witnesses, besides the officer who executed the Search Authorization. 4.3. A copy of the Panchnama is to be handed over to the persons whose signatures were obtained on the Search Authorization at the time of start of the search. This fact should be recorded in the Panchnama itself. Acknowledgement of the Panchnama having been given to the person in charge of the premises should also be obtained. 4.4. Points to be incorporated in a Panchnama: (I) Panchnama is the single most important document in the context of search and seizure operations. This document should, therefore, be prepared carefully incorporating, interalia, the following details: (a) Name, age, address, and occupation of Panchas. (b) Date, time, and place of proceedings. (c) Reason/authority for search or purpose of visit. (d) Mention of the fact that the officers conducting the search disclosed their identity to the Panchas. (e) Name and designation of the officer leading the search team. (f) Mention of the fact of presence of the occupants/representatives of the premises to be searched during the course of the search. (g) Mention of the fact of the Execution of the Search Authorization on the occupant/representative of the premises to be searched. (h) Mention of the fact that one of the occupants/representatives of the party and both panchas have signed the Search Authorization. (i) Mention of the fact of offering personal search of each member of the search team before commencing search and again after conclusion of search. (j) Mention of the fact of presence of a lady officer in the party conducting the search in case of search of residence. (k) Mention of any important event taking place during the operation e.g. arrival of more officers/persons, calling a photographer for photography, drawing of samples, detection of large amounts of cash, sealing of almirah, cupboard etc. (l) Mention of the details of production of statutory records and other private records, Account Books etc. presented by the representative of the taxpayer for inspection in case of checking. (m) Mention of how the verification of goods, inputs were undertaken (procedure adopted for weighment, measurement, test checking of standard packages/units etc). It should be supported by inventory of stocks verified. (n) Record of the fact that in respect of goods verified physically, no other stock was available/left over. Current day s production and issue of inputs may be specifically mentioned as excluded. (o) Making of a separate annexure for inventories of records/documents to be resumed and articles/goods seized. (p) Mention of the grounds forming the reasons to believe that goods seized were liable to confiscation under the CGST Act, 2017 or the Rules made thereunder and the provisions under which seizure was made. (q) Mention of the value and duty of goods seized/detained and whether seized goods given in supurdagi or taken into possession. (r) Record of the facts regarding drawal of samples, if any. If sealed, a specimen of the seal to be given on the body of Panchnama. (s) Mention of the details of brand name, trade name, standard packing and markings given on goods verified/seized. (t) In case of concealment of excisable goods, records or evidences, mention of the facts of place of storage (basement etc.) and manner of concealment. (u) Mention of the fact that each page of records resumed/seized has been numbered following one set pattern viz.1, 2, 3 etc. (and not 1, 3, 5 .). (v) Mention of the fact that the first and last page of every file, register, Account Book etc. has been signed by the authorized representative of the taxpayer or the person on whom the Search Authorization was executed. (w) Mention of the fact that every loose paper/vital document has been got signed individually from the concerned person from whose seat or cabin the same was recovered and from the person on whom Search Authorization was executed. (x) In case any portion of the premises, almirah, safe, store etc. is found to be locked and cannot be opened for some reasons or the other, the same may be sealed and a mention may be made accordingly in the Panchnama. This sealed part can be searched using fresh Search Authorization on any following day. (y) The details of any locker, almirah or any section of premises which has been sealed for reasons that the officers could not immediately obtain access for want of the keys, hypothecation to the bank or any other reason, should be incorporated in the Panchnama. (z) The grounds for seizure/resumption of records/documents etc. should also be mentioned in the Panchnama. (II) The above list is only illustrative and not exhaustive as there can be numerous factors which may have to be incorporated in Panchnama depending on the nature of proceedings and the events taking place during the search proceedings. (III) Further, if two or more firms/units are operating from the same premises or there are common employees etc., the Panchnama should contain relevant details, which may include ground plan, details of plant and machinery installed etc. When no incriminating documents or contraband is found, a nil Panchnama should be drawn.