GST Jamku AIPower of inspection, search and seizure.
Section 67(1)
Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that—
(a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or
(b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place.
When an authorized officer, not below the rank of Joint Commissioner, has valid reasons to believe that certain actions may lead to tax evasion under this Act, they are empowered to take specific actions. These actions are triggered when:
1. Suppression of Transactions: If a taxable person deliberately hides transactions related to the supply of goods or services, manipulates their stock of goods, claims excess input tax credit, or violates any provisions of the Act to evade taxes, the authorized officer can intervene.
2. Unlawful Business Practices: In the case of individuals involved in the business of transporting goods or those responsible for warehouses, godowns, or any other storage facilities, the officer can take action if there is suspicion of goods evading tax payment or if the accounts and goods are managed in a way likely to facilitate tax evasion.
Empowered Action: The authorized officer, with the rank not below Joint Commissioner, can issue a written authorization empowering another officer of central tax to inspect the places of business. This applies to businesses of taxable persons and those engaged in transporting goods, as well as the owners or operators of warehouses, godowns, or any other storage locations.
Conclusion: This provision grants the necessary authority to prevent tax evasion by allowing officers to thoroughly inspect business premises when there are reasonable grounds to suspect illicit activities. Such measures aim to uphold the integrity of the tax system and ensure compliance with the provisions laid out in the Act and its associated rules.
Section 67(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, has reasons 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 proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things:
Provided that where it is not practicable to seize any such goods, the proper officer, or any 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 the previous permission of such officer:
Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act.
Title: Conducting Searches and Seizures under the Goods and Services Tax Act
In the Goods and Services Tax (GST) Act, a designated officer, not below the rank of Joint Commissioner, has the authority to conduct searches and seizures. This authority is exercised when there is a belief that certain goods are subject to confiscation or that specific documents, books, or items could be valuable for legal proceedings under the Act.
Authorization for Search and Seizure:
The officer with the proper authority can either carry out the search and seizure personally or empower another central tax officer in writing to do so. This action is typically taken after an inspection, but it can also be based on other credible reasons.
Provisions for Unseizable Goods:
In cases where seizing the goods is not feasible, the proper officer, or an officer authorized by them, can issue an order to the owner or custodian of the goods. This order prohibits the removal, transfer, or any other dealings with the goods without prior permission from the designated officer.
Retention of Seized Items:
Once goods, documents, books, or items are seized, the officer is only allowed to retain them for as long as necessary. The retention period is determined by the requirements of examination and any subsequent inquiries or legal proceedings under the GST Act.
These provisions ensure that the proper officers have the tools to enforce compliance with the GST Act, allowing for the investigation and necessary actions against any potential violations.
Section 67(3)
The documents, books or things referred to in sub-section (2) or any other documents, books or 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 the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice.
When a taxable person receives a notice under the specified Act or its associated rules, certain documents, books, or items are often referred to during the process. However, if these materials were not crucial for issuing the notice, they must be returned promptly. This article breaks down the process and timeline for returning such documents.
Key Points:
Identification of Documents: The documents, books, or items mentioned in sub-section (2) and any others generated by the taxable person or another individual fall under consideration. These are materials that were not essential for the issuance of the notice under the Act or its rules.
Non-Reliance Criterion: It's important to note that the documents being discussed were not relied upon in the issuance of the notice. This means that they did not play a critical role in the decision-making process related to the notice.
Timely Return: To ensure fairness and efficiency, the specified documents, books, or items must be returned to the respective person. The return process should be completed within a specific timeframe, specifically within thirty days from the issuance of the notice.
Conclusion: In summary, if certain documents, books, or items were not essential for the issuance of a notice under the Act or its rules, they are to be promptly returned to the concerned individual. This ensures a transparent and timely process in accordance with the regulations.
Section 67(4)
The officer authorised under sub-section (2) shall have the power to seal or break open the door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied.
In certain situations, an authorized officer holds the power to take specific actions to access premises or items suspected to contain goods, accounts, registers, or documents. This authority is granted under sub-section (2) and includes the ability to seal or break open doors, almirahs (cupboards), electronic devices, boxes, or receptacles.
Power to Access Denied Areas: The officer authorized in sub-section (2) is empowered to seal or break open the door of any premises if access is denied. This ensures that the officer can enter and investigate areas where there is suspicion of hidden goods or documents related to a person.
Breaking Open Items: Additionally, the authorized officer has the authority to break open almirahs, electronic devices, boxes, or receptacles. This provision is in place when access to these items is denied, and there is a belief that they contain relevant goods, accounts, registers, or documents.
Conclusion: This legal provision grants specific powers to officers for situations where access is denied, and there are suspicions regarding the concealment of important items. The ability to seal or break open doors and items ensures a thorough and effective investigation process.
Section 67(5)
The person from whose custody any documents are seized under sub-section (2) shall be entitled to make copies thereof or take extracts therefrom in the presence of an authorised 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.
When documents are seized from someone's possession, that person has the right to make copies or take extracts from them. This process is supervised by an authorized officer. However, there are situations where this right might be restricted to prevent any negative impact on an ongoing investigation.
Rights of the Person: The individual from whom documents are seized has the right to reproduce those documents or extract information from them. This can be done in the presence of an authorized officer. The officer will specify the place and time for this activity.
Supervision by Authorized Officer: An authorized officer oversees the process of making copies or extracting information from seized documents. This ensures that the procedure is conducted fairly and in accordance with the law.
Exceptions: In some cases, the right to make copies or take extracts may be denied if it is believed that doing so could harm the ongoing investigation. The decision to restrict this right is made by the proper officer in charge.
Conclusion: While individuals have the right to access seized documents, there are exceptions to prevent any interference with ongoing investigations. The involvement of an authorized officer ensures a fair and lawful process for making copies or extracting information from such documents.
Section 67(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.
When goods are seized under sub-section (2), there is a provision for their provisional release. This release can happen through the execution of a bond and the provision of security. The specific manner and amount of security are determined by regulations. Alternatively, the goods can be released by paying the relevant tax, interest, and penalty, as applicable in each case.
Provisional Release of Seized Goods: In the situation where goods are seized, there is a temporary solution in place. The goods can be released provisionally, meaning temporarily, under certain conditions.
Conditions for Release: For the release to happen, certain conditions need to be met. These include executing a bond and providing security. The details of how this is done, and the specific amount of security required, are outlined in the regulations.
Execution of a Bond: One way to secure the release of seized goods is by executing a bond. This is a legal agreement that ensures the person obtaining the release will comply with certain conditions.
Furnishing of Security: In addition to the bond, security needs to be provided. The type and amount of security are determined by the regulations, and it serves as a guarantee to cover any potential issues related to the released goods.
Payment Option: Alternatively, instead of going through the process of a bond and security, the person can choose to pay the applicable tax, interest, and penalty. This provides another avenue for the release of the seized goods.
Conclusion: The provision for the release of seized goods offers flexibility through either executing a bond and providing security or making the necessary payments. These options ensure a fair process for individuals involved while maintaining compliance with regulations.
Section 67(7)
Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, 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.
When authorities seize goods under specific circumstances, it is essential to adhere to a set of rules. This article discusses the return of seized goods when no notice is provided within a specified timeframe.
Return of Seized Goods: If goods are seized and no notice is given within six months from the date of seizure, these goods must be returned to the individual from whom they were taken.
Extension of Timeframe: However, if there is a valid reason, the responsible officer has the authority to extend this six-month period. The extension can be granted for an additional six months, provided sufficient cause is demonstrated.
Conclusion: In summary, the return of seized goods is governed by a timeframe, with the possibility of extension under certain circumstances. This ensures a fair and reasonable process for all parties involved.
Section 67(8)
The Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (2), be disposed of by the proper officer in such manner as may be prescribed.
Section 67(9)
Where any goods, being goods specified under sub-section (8), have been seized by a proper officer, or any officer authorised by him under sub-section (2), he shall prepare an inventory of such goods in such manner as may be prescribed.
The government has the authority to determine the disposal of certain goods based on factors such as their perishable or hazardous nature, loss of value over time, limited storage space, or other relevant considerations. This is done through an official notification.
Factors Considered: The decision to dispose of goods is influenced by various factors, including the nature of the goods (whether they can spoil or are dangerous), the decrease in their value over time, the availability of storage space, and other relevant considerations.
Notification Process: Once goods are seized under a specific sub-section (sub-section 2), the government can issue a notification to specify the goods or class of goods that need to be disposed of. This process aims to ensure a timely and appropriate disposal method.
Prescribed Disposal Method: The proper officer is responsible for disposing of the goods in the manner prescribed by the government. This ensures a standardized and efficient approach to the disposal process.
Conclusion: By establishing guidelines for the disposal of goods, the government seeks to address issues such as perishability, hazardous nature, and storage constraints. This streamlined approach helps in the quick and proper disposal of goods, benefiting both the government and the public.
Section 67(10)
The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that sub-section (5) of section 165 of the said Code shall have effect as if for the word "Magistrate", wherever it occurs, the word "Commissioner" were substituted.
Section 67(11)
Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents 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 proceedings under this Act or the rules made thereunder for prosecution.
The Code of Criminal Procedure, 1973, has certain rules about search and seizure activities. These rules, outlined in Section 165, are important for ensuring fair and lawful procedures.
Application of the Code: The rules in the Code of Criminal Procedure also apply to search and seizure activities under specific circumstances. These circumstances require adherence to certain modifications, ensuring a balance between legal requirements and practical considerations.
Modification in Terminology: One notable modification pertains to the term "Magistrate" in Section 165(5) of the Code. In the context of this particular section, the term "Magistrate" is replaced with the term "Commissioner." This substitution is essential for aligning with the specific procedures outlined in this section.
Key Implications: This modification influences how the procedures are carried out, making it clear that, in the described situations, the role typically assigned to a "Magistrate" is now fulfilled by a "Commissioner." This change is crucial in maintaining the legality and authority of the search and seizure process.
Conclusion: In summary, the Code of Criminal Procedure, 1973, guides the rules for search and seizure, with a modification in terminology to ensure the appropriate application of these rules. The substitution of "Commissioner" for "Magistrate" in specific instances is a significant aspect that helps uphold the integrity of the legal processes involved.
Section 67(12)
The Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business premises of any taxable person, to check the issue of tax invoices or bills 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.
The Commissioner or an authorized officer can buy goods or services from a taxable person's business premises. This is done to ensure that the tax invoices or bills of supply issued by the taxable person are accurate. Once the officer returns the purchased goods, the taxable person must refund the amount paid, canceling any previously issued tax invoice or bill of supply.
Verification Process: To check the accuracy of tax invoices or bills of supply, the Commissioner or an authorized officer has the power to purchase goods or services from the business premises of a taxable person. This is a measure to ensure that the taxable person is issuing correct invoices.
Refund Procedure: Upon the return of the purchased goods, the taxable person or the person in charge of the business premises must refund the amount paid for the goods. This refund is made after canceling any tax invoice or bill of supply that was issued earlier.
Conclusion: This process helps maintain the integrity of tax invoices and bills of supply, ensuring that businesses are adhering to the correct procedures. The authority granted to the Commissioner or authorized officers plays a crucial role in regulating and verifying transactions to prevent inaccuracies.