INSPECTION, SEARCH, SEIZURE AND SUMMON UNDER GST ACT

Power of inspection

1. Joint Commissioner or Additional Commissioner is empowered to issue authorization for inspection of any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place.
2. Inspection can be ordered if there is reasons to believe that:

• taxable person has suppressed any transaction relating to supply of goods or service or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of the rules made thereunder to evade tax under the GST Acts; and
• any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under the GST Acts.

Access to business premises

1. Joint Commissioner or Additional Commissioner can authorize any officer to access to any place of business of a registered person to inspect books of account, documents, computers, computer programs, computer software whether installed in a computer or otherwise and such other things as he may require and which may be available at such place, for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue.

Power of search and seizure

1. Joint Commissioner or Additional Commissioner can authorise in writing any other officer to search and seize or may himself search and seize such goods, documents or books or things
2. They can issue authorization where there are reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place.
3. This "reason to believe" can be either in pursuant to an inspection carried out or otherwise.
4. Where it is not practical to seize goods, an order can be served on the owner or the custodian of the goods that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.
5. The officers are empowered 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.

Procedure for search

1. Authorisation in FORM GST INS-01 is to be issued by Joint Commissioner or Additional Commissioner authorising any other officer subordinate to him to conduct the inspection or search or as the case may be, seizure of goods, documents, books or things liable to confiscation
2. Where any goods, documents, books or things are liable for seizure, the proper officer or an authorised officer shall make an order of seizure in FORM GST INS-02.
3. The seized goods can be kept in the custody of owner or person from whom these were seized.
4. However, if it is not feasible to seize the goods, a prohibition order in FORM GST INS-03 will be issued to the effect that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of proper officer.
5. The officer seizing the goods, documents, books or things shall prepare an inventory of such goods or documents or books or things containing, inter aia, description, quantity or unit, make mark or model, where applicable, and get it signed by the person from whom such goods or documents or books or things are seized.
6. Documents etc. shall be retained only for so long as may be necessary for their examination and for any inquiry or proceedings under the GST Acts .
7. However, the person from whom goods have been seized is entitled to make copies take extracts therefrom in the presence of an authorised officer thereof.
8. However where proper officer is of opinion that taking such copies/extracts, would prejudicially affect the investigation, the same can be denied.
9. The documents/books/things etc., if not relied upon in the show cause notice shall be returned within period not exceeding 30 days from date of issuance of notice.
10. Dummy purchase of goods/services (Decoy Customer) can be authorized by Commissioner to check the evasion.
11. The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure under GST, shall apply to search and seizure subject to the modification that sub-section (5) of Section 163 of the said Code shall have effect as if for the word "Magistrate, wherever it occurs the word "Commissioner" were substituted.
12. Inspection of goods in movement is authorized and the person in-charge of conveyance has to produce prescribed documents for verification and allow inspection of goods.

Provisional release of goods

1. The seized goods can be released, on a provisional basis, upon execution of a bond for the value of the goods in FORM GST INS-04 and furnishing of a security in the form of a bank guarantee equivalent to the amount of applicable tax. interest and penalty payable.
2. Applicable tax shall include Central tax and State tax or Central tax and the Union Territory tax as the case may be and the cess, if any.
3. In case the person to whom the goods were released provisionally fails to produce the goods at the appointed date and place indicated by the proper officer, the security shall be exchanged and adjusted against the tax, interest and penalty and fine, if any, payable in respect of such goods.
4. Government can notify goods of hazardous nature and manner of their immediate disposal on seizure.

Return of seized goods

1. If no Show Cause Notice in respect of seized goods is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized. However, the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months.

Summons

1. Superintendent is empowered to summon persons to give evidence and produce documents.
2. The inquiry to be conducted on summons has to be done in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure, 1908 (5of 1908) .
3. Every such inquiry shall be deemed to be a "judicial proceedings" within the meaning of Section 193 and Section 228 of the Indian Penal Code (45 of 1860).
4. Although statutory provisions are silent, presence of Advocate at a visible distance but beyond hearing range has been allowed.