Inspection, Search, Seizure and Arrest
GST Law and Procedure – GST Law and Procedure [January, 2019]
GST
Chapter Forty Nine
Inspection, Search, Seizure and Arrest
In any tax administration the provisions for Inspection, Search, Seizure and Arrest are provided to protect the interest of genuine tax payers (as the Tax evaders, by evading the tax, get an unfair advantage over the genuine tax payers) and as a deterrent for tax evasion. These provisions are also required to safeguard Government's legitimate dues. Thus, these provisions acts as a deterrent and by checking evasion provide a level playing field to genuine tax payers.
2. It may be mentioned that the options of Inspection, Search, Seizure and Arrest are exercised, only in exceptional circumstances and as a last resort, to protect the Government Revenue. Therefore, to ensure that these provisions are used properly, effectively and the rights of tax payers are also protected, it is stipulated that Inspection, Search or
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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 actions:
(a) Suppression of any transaction relating to supply of goods or services or stock in hand;
(b) Claimed excess input tax credit;
(c) Contravention of any provisions of the Act or the Rules to evade tax;
(d) Transporting or keeping goods which escaped payment of tax or manipulating accounts or stocks which may cause evasion of tax;
Inspection can also be done of the conveyance, carrying a consignment of value exceeding specified limit. The person in charge of the conveyance has to produce documents / devices for verification and allow inspection. Inspection during transit can be done even without authorisation of Joint Commissioner.
(ii) Inspection in movement
(a) Any consignment, value of which is exceeding ₹ 50,000/-, may be stopped at any pl
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ns of search and seizure also provides enough safeguards and the GST Law stipulates that search of any place of business etc. can be carried out only under authorisation from an officer of the rank of Joint Commissioner and if he has a reason to believe that the person concerned has done at least one of the following:-
(a) Goods liable to confiscation or any documents /books/record/things, which may be useful for or relevant to any proceedings, are secreted in any place then all such places can be searched;
(b) All such goods/documents/books/record/ things may be seized, however, if it is not practicable to seize any such goods then the same may be detained. The person from whom these are seized shall be entitled to take copies/ extracts of seized records;
(c) The seized documents/books/things shall be retained only till the time the same are required for examination /enquiry/proceedings and if these are not relied on for the case then the same shall be returned within 30 days from
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sses, a record of entire proceedings is made and forwarded to the Commissioner forthwith.
(iv) Arrests
In the administration of taxation the provisions for arrests are created to tackle the situations created by some unscrupulous tax evaders. To some these may appear very harsh but these are necessary for efficient tax administration and also act as a deterrent and instil a sense of discipline. The provisions for arrests under GST Law have sufficient inbuilt safeguards to ensure that these are used only under authorisation from the Commissioner. Besides this, the GST Law also stipulates that arrests can be made only in those cases where the person is involved in offences specified for the purposes of arrest and the tax amount involved in such offence is more than the specified limit. The salient points of these provisions are:-
(a) Provisions for arrests are used in exceptional circumstance and only with prior authorisation from the Commissioner.
(b) The law lays down a stringent c
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