investigation u/s 67

[FARIDUDDIN AHMAD]

sir search and seizure proceedings u/s 67 has been done on 05/12/2022 by the SIB UPSGST officials. however jurisdiction of the firm pertain to CGST department. later UPSGST department issued summon u/s 70 requiring the tax payer to produce books of accounts from the period 1 july 2017 to 5/12/2022. however the seizure does not contain any documents related to 1 july 2017 to 5/12/2022. seizure only contain the stock lying in the factory. kindly clarify that can the UPSGST office undertake the proceedings u/s 67 and for how many previous years records can be submitted.

[FARIDUDDIN AHMAD]

one more fact is that CGST department conducted audit u/s 65 for the period 1 july 2017 to 31/03/2020 last three years and issued ADT 02 which has been submitted to the UPSGST officials in the proceedings of summon. but the state officials are not relining on the audit report without providing the reason.

[Lakshman Kadali]

To undertake seizure under Section 67, the officers should be having authorisation from Joint Commissioner (JC) and the JC can authorise the search and seizure only when he has reasons to believe that the goods are liable for confiscation. Many times, the department would not be communicating such reasons to the taxpayers.

With respect to cross-jurisdiction, the state tax department can initiate the proceedings if the same is an intelligence-based enforcement action. This was clarified by way of a circular by GST Council.

However, we can understand the reasons behind the investigation based on the questions asked by the department during the summons. Once we understand the reasons, we can check whether the department is conducting the investigation on same proceedings which are already covered by the audit done by central tax authorities (specific Audit Para). If it is covered, we can take shelter of Sec 6(2) of CGST Act, 2017.Ideally, the department cannot invoke Section 74 for issuance of SCN when audit is already conducted by the department. There are many settled jurisprudence under Pre-GST laws

With respect to time limit till which the department can ask for information, they can ask for the same up to 5 years from the due date of annual return for respective financial years.

AI Summary

Search and seizure authority in GST can be exercised across jurisdictions; departments may summon past records within statutory limitation. Search and seizure under GST requires proper authorisation and reasons to believe goods are liable for confiscation. State authorities can undertake intelligence based enforcement and summon past books even if central authorities previously audited the same periods; taxpayers should check overlap with prior audits and invoke statutory protections to resist duplicative proceedings while noting limitation periods for production of records.