• The CGST/SGST officer not below the rank of Joint Commissioner is empowered to authorise any officer of CGST/SGST in writing to carry inspection of any place of business, if he has reason to believe that the specified circumstances exist to evade tax or likely to cause evasion of tax in respect of ‘taxable person’ or ‘the person engaged in the business of transporting goods’ or ‘the owner or operator of warehouse or godown or any other place’.
• The authorisation for inspection must be issued in FORM GST INS-01 by the CGST/SGST officer not below the rank of Joint Commissioner to any subordinate officer.

The specified circumstances exist are segregated in two categories mentioned herein below:

1. In case of ‘Taxable Person’, to evade tax under the GST Act:
   1. Transaction relating to supply of goods/or services suppressed.
   2. The stock in hand is suppressed.
   3. Input tax credit is claimed in excess.
   4. Indulged in contravention of any of the provisions of GST Act or rules.
2. In case of ‘person engaged in the business of transporting goods’ or ‘an owner or operator of warehouse or godown or any other place’, there is reason to believe that:
   1. Person is keeping goods which have escaped payment of tax.
   2. Person has kept accounts in such manner likely to cause evasion of tax.
   3. Person has kept goods in such manner likely to cause evasion of tax.

The CGST/SGST officer who is not below the rank of Joint Commissioner is empowered to carry search and seizure or he may authorize in writing in FORM GST INS-01 any other CGST/SGST officer subordinate to him for the same.

1. Pursuant to inspection u/s. 60(1) or otherwise

   The search and seizure can be effected either in pursuant to an inspection under sub-section (1) or otherwise. It is not necessary that the search and seizure can take place only after inspection u/s. 60(1). It can take place directly without inspection under sub-section (1).

2. Circumstances for search and seizure

   The powers of search and seizure can be exercised only if the said officer has reason to believe that:

   1. Any goods liable to confiscation are secreted in any place, or
   2. Any documents or books or things which shall be useful or relevant for any proceeding under GST Act, as per the opinion of the said officer, are secreted in any place.
3. Order of seizure

   Where any goods, documents, books or things are liable for seizure under sub-section (2) of Section 67, the CGST/SGST officer must make an order of seizure in FORM GST INS-02.

4. Inventory of articles seized

   The SGST/CGST officer seizing the goods, documents, books or things must prepare inventory with description, quantity or unit, make, mark or model. The said inventory should be signed by the person from whom such goods or documents or books or things are seized. [Rule 139(5)]

5. Where it is not practicable to seize any goods

   The owner or custodian of the goods may be served an order in FORM GST
   INS-03 that he shall not remove, part with, or otherwise deal with the goods except with previous permission.

6. Retention of goods, documents or books or things so seized

   The goods, documents or books or things so seized shall be retained only for so long as may be necessary for their examination and for enquiry or proceeding.

7. Articles to be seized

   The SGST/CGST officer is empowered to seize goods, documents or books or things. Here it is pertinent to note that the officer is empowered not only to seize the books of account but also goods. Under sub-section (2) after word books words ‘or things’ is also used. As per Merriam Webster dictionary one of the relevant meanings of word ‘things’ is ‘whatever may be possessed or owned or be the object of a right’.

The documents, books or things, which are not relied upon for issue of notice, will returned within three months of issue of notice.

The SGST/CGST officer, who would be authorised to search and seize under sub-section (2) of Section 60, is empowered to break open the door of any premises or to break open any almirah (cupboard), electronic devices, box, receptacle (container) in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, box or receptacle is denied.

The person from whose custody the documents are seized can make copies or take extracts of those documents in the presence of authorised CGST/SGST officer. Such making of copies or taking extract of documents seized can be denied in cases where the CGST/SGST officer is of the opinion that making copies or taking extract may prejudicially affect the investigation.

The goods so seized under sub-section (2) of Section 60, shall be released on provisional basis upon following conditions

1. Execution of bond for value of the goods in FORM GST INS-04.
2. Furnishing Bank Guarantee of the amount equivalent to tax, interest and penalty payable. The amount of tax shall include CGST, SGST, UTGST and compensation cess, if applicable.

Encashment of Bank Guarantee upon failure to produce goods – The bank guarantee shall be encashed if the person fails to produce the goods at the appointed date and place indicated by the proper officer and the same shall be adjusted against the tax, interest and penalty payable in respect of such goods, if any.

Notice in respect of goods seized must be issued within six months of seizure of the goods. If such notice is not issued within six months of seizure of the goods, the goods shall be returned to the person from whose possession they were seized. The said period of six months can be extended on sufficient cause shown by the proper officer for further period not exceeding six months.

Considering perishable or hazardous nature of goods or depreciation in value of goods, constraints of storage space or any other relevant consideration, the Central/ State Govt. is empowered to issue notification to specify such goods or classes of goods which shall be disposed of as soon as they are seized.

Release of perishable or hazardous nature of goods

Perishable or hazardous nature of goods or things shall be released by an order in FORM GST INS-05, if the taxable person pays

• an amount equivalent to market price of such goods or
• amount of tax, interest and penalty that would be payable,
• whichever is less. [Rule 141(1)]

If the amount as stated in Rule 141(1) is not paid, the CGST/SGST Commissioner may dispose of the goods or things of Perishable or hazardous nature and the amount realised thereby shall be adjusted against the tax, interest, penalty or any other amount payable in respect of such goods. [Rule 141(2)].

The proper officer shall prepare an inventory of perishable or hazardous goods.

• Provisions of Criminal Procedure, 1973 (2 of 1974) (CrPC), relating to search and seizure, shall be applicable to search and seizure under Section 67.
• Word ‘Magistrate’ in sub-section (5) of Section 165 should be read as “Commissioner”�.

• The account, registers or documents produced before the proper officer can be seized.
• Proper officer must have Reason to believe that any person has evaded or is attempting to evade the payment of tax.
• Reasons to be recorded in writing by proper officer.
• Receipt of goods seized must be given by the proper officer.

• The commissioner may cause to purchase of any goods or services to check the issue of tax invoices or bill of supply.
• On return of goods so purchased by proper officer, the taxable person shall refund the amount so paid towards the goods after cancelling tax invoice or bill of supply.

The Government may require the person in charge of a conveyance to carry with him such documents and such devices as may be prescribed if it carries any consignment of goods that exceeds such amount as may be specified.

The documents required to be carried with conveyance, shall be validated in such manner as may be specified.

• The proper officer may intercept and he may require person in charge of the said conveyance to produce such documents and devices for verification as may be specified.
• The person in charge of conveyance shall be liable to produce documents and devices for verification, also he shall allow inspection of goods.

The following offences which has effect of evasion of tax or wrong utilization of ITC or wrong refund exceeding ₹ 5 Crore are cognisable and non-bailable offences. All other offences are non-cognisable and bailable. [Section 132(4) & (5)].

• Supply of goods or services without issue of any invoice with intention to evade tax [Section 132(1)(a)].
• Issue of any invoice or bill without supply of goods or services leading to wrongful availment or utilisation of ITC or refund of tax [Section 132(1)(b)].
• Availment of ITC using invoices without supply of goods or services [Section 132(1)(c)].
• Collection of amount of tax but failure to pay the same beyond period of three months from the date on which it becomes due for payment [Section 132(1)(d)].

Offences for arrest

Provisions of arrest can be invoked only in cases of above offences which has effect of evasion of tax of ₹ 2 Crore or more.

Order of authorisation for arrest

Where the Commissioner of CGST/SGST has reason to believe that the above offences are committed by any person, he may by order authorise any officer to arrest such person.

The person so arrested for cognisable offence should be informed the reason for arrest and should be presented before the magistrate within 24 hours of arrest.

• The person so arrested for non-cognisable and bailable offence should be released on bail if furnishes surety as specified under Section 436 of CrPC.
• In cases of non-cognisable and bailable the Deputy Commissioner or the Assistant Commissioner are empowered to grant bail for releasing the person arrested.