TaxTMI 
TaxTMI 
Inspection, Search, Seizure and Arrest
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....pon 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/SGST Act. to evade tax; v. a transporter or warehouse owner 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. Q 4. What are the powers of the proper officer during the search? Ans. The officer authorised under to carry out inspection 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. (Section 67(4) of the Act). Q 5. Whether the person from whose custody any documents are seized is entitled to get the copies there....
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.... need not be recorded invariably in each case. However, it would be better if the materials / information etc. are recorded before issue of search warrant or before conducting search. Q 10. What is a Search Warrant and what are its contents? Ans. The written authority to conduct search is generally called search warrant. The competent authority to issue search warrant is an officer of the rank of Joint Commissioner or above. A search warrant must indicate the existence of a reasonable belief leading to the search. Search Warrant should contain the following details: i. the violation under the Act, ii. the premise to be searched, iii. the name and designation of the person authorized for search, iv. the name of the issuing officer with full designation along with his round seal, v. date and place of issue, vi. serial number of the search warrant, vii. period of validity i.e. a day or two days etc. Q 11. When do goods become liable to confiscation under the provisions of CGST/SGST Act? Ans. As per section 130 of SGST/SGST Act, goods become liable to confiscation when any person does the following: (i) supplies or receives any goods in contravention of any of the provisions ....
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....ed to be witness to the search. The witnesses should be briefed about the purpose of the search. * Before the start of the search proceedings, the team of officers conducting the search and the accompanying witnesses should offer themselves for their personal search to the person in-charge of the premises being searched. Similarly, after the completion of search all the officers and the witnesses should again offer themselves for their personal search. * A Panchnama / Mahazar of the proceedings of the search should necessarily be prepared on the spot. A list of all goods, documents recovered and seized/detained should be prepared and annexed to the Panchnama/Mahazar. The Panchnama / Mahazar and the list of goods/ documents seized/detained should invariably be signed by the witnesses, the in-charge/ owner of the premises before whom the search is conducted and also by the officer(s) duly authorized for conducting the search. * After the search is over, the search warrant duly executed should be returned in original to the issuing officer with a report regarding the outcome of the search. The names of the officers who participated in the search may also be written on the revers....
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.... to the owner of the property or the person who possesses the property at a particular point of time by a legal order/notice is called detention. Seizure is taking over of actual possession of the goods by the department. Detention order is issued when it is suspected that the goods are liable to confiscation. Seizure can be made only on the reasonable belief which is arrived at after inquiry/investigation that the goods are liable to confiscation. Q 19. What are the safeguards provided in GST Act(s) in respect of Search or Seizure? Ans. Certain safeguards are provided in section 67 of CGST/SGST Act in respect of the power of search or seizure. These are as follows: i. Seized goods or documents should not be retained beyond the period necessary for their examination; ii. Photocopies of the documents can be taken by the person from whose custody documents are seized; iii. For seized goods, if a notice is not issued within six months of its seizure, goods shall be returned to the person from whose possession it was seized. This period of six months can be extended on justified grounds up to a further period of maximum six months; iv. An inventory of seized goods shall be made b....
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....ology or new models etc. (xvii) Any goods seized by the proper officer under section 67 of the said Act, which are to be provisionally released under section 67(6) of the said Act, but provisional release has not been taken by the concerned person within a period of one month from the date of execution of the bond for provisional release. (Section 68(7) of the CGST Act, 2017) Q 22. Is there any special document required to be carried during transport of taxable goods? Ans. Under section 68 of CGST /SGST Act, a person in charge of a conveyance carrying any consignment of goods of value exceeding a specified amount may be required to carry a prescribed document as prescribed in the E way Bill Rules. Chapter XVI of CGST Rules contains provisions relating to documents required to be carried. Q 23. What is meant by the term "arrest"? Ans. The term 'arrest' has not been defined in the CGST/SGST Act. However, as per judicial pronouncements, it denotes 'the taking into custody of a person under some lawful command or authority'. In other words, a person is said to be arrested when he is taken and restrained of his liberty by power or colour of lawful warrant. Q 24. When can the pro....
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....s reasonable but this shall not exceed twenty-four hours (excluding the journey time from place of arrest to the Magistrate's court). Within this period, as provided under section 56 of Cr.PC. the person making the arrest shall send the person arrested without warrant before a Magistrate having jurisdiction in the case. In a landmark judgment in the case of D.K. Basu v. State of West Bengal reported in 1997 (1) SCC 416 = 1996 (12) TMI 350 - SUPREME COURT, the Hon'ble Supreme Court has laid down specific guidelines required to be followed while making arrests. While this is in relation to police, it needs to be followed by all departments having power of arrest. These are as under: i. The police personnel carrying out the arrest and handling the interrogation of the arrestee should bear accurate, visible and clear identification and name tags with their designations. The particulars of all such police personnel who handle interrogation of the arrestee must be recorded in a register. ii. The police officer carrying out the arrest shall prepare a memo of arrest at the time of arrest and such memo shall be attested by at least one witness, who may be either a member of the family of....
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....d by the officer causing the arrest, within 12 hours of effecting the arrest and at the police control room it should be displayed on a conspicuous notice board. Q 27. What are the broad guidelines for arrest followed in CBIC? Ans. Decision to arrest needs to be taken on case-to- case basis considering various factors, such as, nature and gravity of offence, quantum of duty evaded or credit wrongfully availed, nature and quality of evidence, possibility of evidences being tampered with or witnesses being influenced, cooperation with the investigation, etc. Power to arrest has to be exercised after careful consideration of the facts of the case which may include: i. to ensure proper investigation of the offence; ii. to prevent such person from absconding; iii. cases involving organized smuggling of goods or evasion of customs duty by way of concealment; iv. master minds or key operators effecting proxy/ benami imports/exports in the name of dummy or non-existent persons/IECs, etc.; v. where the intent to evade duty is evident and element of mensrea/guilty mind is palpable; vi. prevention of the possibility of tampering with evidence; vii. intimidating or influencing witness....
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....l proceeding. If a person does not appear on the date when summoned without any reasonable justification, he can be prosecuted under section 174 of the Indian Penal Code (IPC). If he absconds to avoid service of summons, he can be prosecuted under section 172 of the IPC and in case he does not produce the documents or electronic records required to be produced, he can be prosecuted under section 175 of the IPC. In case he gives false evidence, he can be prosecuted under section 193 of the IPC. In addition, if a person does not appear before a CGST/ SGST officer who has issued the summons, he is liable to a penalty up to ₹ 25,000/- under section 122(3) (d) of CGST/SGST Act. Q 34. What are the guidelines for issue of summons? Ans. The Central Board of Indirect Taxes and Customs (CBIC) in the Department of Revenue, Ministry of Finance has issued guidelines from time to time to ensure that summons provisions are not misused in the field. Some of the important highlights of these guidelines are given below: i. summons is to be issued as a last resort where assesses are not co-operating and this section should not be used for the top management; ii. the language of the summons ....