Goods and Services Tax

What are the precautions to be observed while issuing summons?
Question 32
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 32. What are the precautions to be observed while issuing summons?
Ans. The following precautions should generally be observed when summoning a person:-
(i) A summon should not be issued for appearance where it is not justified. The power to summon can be exercised only when there is an inquiry being under

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What are the guidelines for issue of summons?
Question 31
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 31. What are the guidelines for issue of summons?
Ans. The Central Board of Excise and Customs (CBEC) 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 are 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 should not be harsh and legal which causes unnecessary mental stress and

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What can be the consequences of nonappearance to summons?
Question 30
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 30. What can be the consequences of nonappearance to summons?
A. The proceeding before the official who has issued summons is deemed to be a judicial 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 C

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What are the responsibilities of the person so summoned?
Question 29
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 29. What are the responsibilities of the person so summoned?
Ans. A person who is issued summon is legally bound to attend either in person or by an authorized representative and he is bound to state the truth before the officer who has issued the summon upon any subject which is the subject matter of examination

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When can the proper officer issue summons under MGL?
Question 28
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 28. When can the proper officer issue summons under MGL?
Ans. Section 63 of MGL gives powers to a duly authorized CGST/SGST officer to call upon a person by issuing a summon to present himself before the officer issuing the summon to either give evidence or produce a document or any other thing in any inquiry which an

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What are cognizable and non-cognizable offences under MGL?
Question 27
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 27. What are cognizable and non-cognizable offences under MGL?
Ans. In section 73 (4) of MGL, it is provided that the offences relating to taxable goods and /or services where the amount of tax evaded exceeds ₹ 2.5 crores, shall be cognizable and non-bailable. Other offences under the act are non-cognizabl

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What is a non-cognizable offence?
Question 26
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 26. What is a non-cognizable offence?
Ans. Non-cognizable offence means relatively less serious offences in respect of which a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiated without a court order.
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Statute, statutory provisions legislation, law, enactment, Ac

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What is a cognizable offence?
Question 25
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 25. What is a cognizable offence?
Ans. Generally, cognizable offence means serious category of offences in respect of which a police officer has the authority to make an arrest without a warrant and to start an investigation with or without the permission of a court.
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Statute, statutory provisions legislation, law, enactment, Acts, Ru

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What are the broad guidelines for arrest followed in CBEC?
Question 24
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 24. What are the broad guidelines for arrest followed in CBEC?
Ans. Decision to arrest needs to be taken on case-tocase 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 ta

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What are the precautions to be taken during arrest?
Question 23
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 23. What are the precautions to be taken during arrest?
Ans. The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating to arrest and the procedure thereof must be adhered to. It is therefore necessary that all field officers of CGST/SGST be fully familiar with the provisions of the Code of Criminal Procedure, 1973.
One important provision to be taken note of is section 57 of Cr.P.C., 1973 which provides that a person arrested without warrant shall not be detained for a longer period than, under the circumstances of the case, is reasonable but th

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urate, 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 the arrestee or a respectable person of the locality from where the arrest is made. It shall also be counter signed by the arrestee and shall contain the time and date of arrest.
iii. A person who has been arrested or detained and is being held in custody in a police station or interrogation center or other lock up, shall be entitled to have one

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which shall also disclose the name of the next friend of the person who has been informed of the arrest and the names and particulars of the police officials in whose custody the arrestee is.
vi. The arrestee should, where he so requests, be also examined at the time of his arrest and major and minor injuries, if any present on his/her body, must be recorded at that time. The 'Inspection Memo' must be signed both by the arrestee and the police officer effecting the arrest and its copy provided to the arrestee.
vii. The arrestee should be subjected to medical examination by the trained doctor every 48 hours during his detention in custody by a doctor on the panel of approved doctors appointed by Director, Health Services of the concerned

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What are the safeguards provided under MGL for a person who is placed under arrest?
Question 22
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 22. What are the safeguards provided under MGL for a person who is placed under arrest?
Ans. There are certain safeguards provided under section 62 for a person who is placed under arrest. These are:
i. If a person is arrested for a cognizable offence, he must be informed in writing of

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When can the proper officer authorize ‘arrest’ of any person under MGL?
Question 21
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 21. When can the proper officer authorize 'arrest' of any person under MGL?
Ans. The Commissioner of CGST/SGST can authorize a CGST/SGST officer to arrest a person if he has reasons to believe that the person has committed an offence attracting a punishment prescribed under section 73 (1)(i), 73

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What is meant by the term “arrest”?
Question 20
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 20. What is meant by the term “arrest”?
Ans. The term 'arrest' has not been defined in the Model GST Law. 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

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Is there any special document required to be carried during transport of taxable goods?
Question 19
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 19. Is there any special document required to be carried during transport of taxable goods?
Ans. Under section 61 of MGL, a person in charge of a transport vehicle may be required to carry a prescribed document in respect of such consignments whose value is more than fifty thousand r

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What are the safeguards provided in MGL in respect of Search or Seizure?
Question 18
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 18. What are the safeguards provided in MGL in respect of Search or Seizure?
Ans. Certain safeguards are provided in section 60 of Model CGST/SGST Law 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 sixty days of its seizure, goods shall be returned to the person

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What is the distinction in law between ‘Seizure’ and ‘Detention’?
Question 17
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 17. What is the distinction in law between 'Seizure' and 'Detention'?
Ans. Denial of access 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 t

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Does MGL have any power of detention of goods and conveyances?
Question 16
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 16. Does MGL have any power of detention of goods and conveyances?
Ans. Yes, under Section 69 of MGL, an officer has power to detain goods along with the conveyance (like a truck or other types of vehicle) transporting the goods. This can be done for such goods which are being transported or are stored in tr

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What is the consequence of compounding of an offence under MGL
Question 26
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 26. What is the consequence of compounding of an offence under MGL?
Ans. Sub-section (3) of section 77 provides that on payment of compounding amount no further proceeding to be initiated under this Act and criminal proceeding already initiated shall stand abated.
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Statute, statutory provi

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What is meant by the term ‘Seizure’?
Question 15
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 15. What is meant by the term 'Seizure'?
Ans. The term 'seizure' has not been specifically defined in the Model GST Law. In Law Lexicon Dictionary, 'seizure' is defined as the act of taking possession of property by an officer under legal process. It generally implies taking possession forcibly contrary to the wishes of the owner

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Are there any monetary limits prescribed for compounding of offence
Question 25
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 25. Are there any monetary limits prescribed for compounding of offence?
Ans. Yes. The lower limit for compounding amount is to be the greater of the following amounts:
* 50% of tax involved, or
* 10,000.
The upper limit for compounding amount is to be greater of the following amounts:

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When is search said to be illegal? Is evidence collected in the course of an illegal search admissible in trial proceedings?
Question 14
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 14. When is search said to be illegal? Is evidence collected in the course of an illegal search admissible in trial proceedings?
Ans. Search without a valid search warrant (i.e. issued by other than a competent authority or without a search warran

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Can a CGST/SGST officer access business premises under any other circumstances?
Question 13
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 13. Can a CGST/SGST officer access business premises under any other circumstances?
Ans. Yes. Access can also be obtained in terms of Section 64 of MGL. This provision of law is meant to allow an audit party of CGST/SGST or C&AG or a cost accountant or chartered accountant nominated under s

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Can offences under MGL be compounded
Question 24
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 24. Can offences under MGL be compounded?
Ans. Yes. As per section 78 of the MGL, any offence, other than the following, may upon payment of the prescribed (compounding) amount be compounded and such compounding is permissible either before or after the institution of prosecution:
* Offences numbered 1 to 7 of the 12 major offences (outlined in Q. 16 above), if the person charged with the offence had compounded earlier in respect of any of the said offences;
* Aiding/abetting offences numbered 1 to 7 of the 12 major offences, if the person charged with the offen

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What are the basic requirements to be observed during Search operations?
Question 12
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 12. What are the basic requirements to be observed during Search operations?
Ans. The following principles should be observed during Search:
* No search of premises should be carried out without a valid search warrant issued by the proper officer.
* There should invariably be a lady officer accompanying the search team to residence.
* The officers before starting the search should disclose their identity by showing their identity cards to the person in-charge of the premises.
* The search warrant should be executed before the start of

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n 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 orig

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What is meant by compounding of offences
Question 23
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 23. What is meant b

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