Inspection, Search & Seizure
Powers of the GST Department/Proper Officer
Under Section 67 of the CGST Act 2017, the GST department and the proper officer have several powers to ensure compliance with tax laws and prevent tax evasion. These powers include:
1. Inspection:
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Authorization Requirement: Inspection can only be carried out by a proper officer upon written authorization from an officer of the rank of Joint Commissioner or above.
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Grounds for Inspection: Inspection can be initiated if there is reason to believe that a taxable person has:
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Suppressed any transaction of supply of goods or services.
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Suppressed stock of goods in hand.
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Claimed input tax credit in excess of entitlement.
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Contravened any provision of the Act to evade tax.
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Any person engaged in transporting goods or an owner/operator of a warehouse has kept goods that have escaped payment of tax or kept accounts/goods likely to cause evasion of tax.
2. Search and Seizure:
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Reasonable Grounds Requirement: Search and seizure can be conducted if there are reasonable grounds to believe that goods liable for confiscation or relevant documents are concealed.
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Seizure: Officers can take physical custody of goods, documents, or other assets suspected of being involved in tax evasion.
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Inventory and Documentation: An inventory of seized goods must be prepared, and the officer must document the search proceedings.
3. Confiscation of Goods:
4. Powers During Search:
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Inspection and Seizure: Officers can inspect premises and seize goods or documents pertinent to proceedings under the Act.
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Detention: If seizing goods is impractical, officers may detain them and prevent the owner from disposing them of without permission.
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Access: Officers can forcefully access areas of suspicion and seal premises if access is denied.
5. Provisional Release:
Rights/Powers of the Assessee
While the GST department has significant powers, the CGST Act also provides several safeguards to protect the rights of the assessee during inspections, searches, and seizures:
1. Right to See Warrant or Authorization:
2. Right to Be Informed:
3. Presence During Search:
4. Right to Copies of Documents:
5. Right to Record Objections:
6. Right to Legal Assistance:
7. Timely Release of Seized Items:
8. Right to Photocopies:
9. Notice Period for Goods:
10. Application of Criminal Procedure Code:
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The provisions of the Code of Criminal Procedure 1973 relating to search and seizure apply, with modifications. Instead of sending copies of records made during the search to the nearest Magistrate, they are sent to the Principal Commissioner/Commissioner of CGST. [Section 67(10)]
Conclusion
Section 67 of the CGST Act establishes the powers of the GST department to conduct inspections, searches, and seizures to enforce tax compliance and prevent evasion. However, it also ensures that the rights of the assessee are protected through various safeguards and procedural requirements. By balancing these powers and rights, the Act promotes fairness and integrity in the administration of GST regulations.
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CA Kushagra Mathur |
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