Search and Seizure under GST

Meaning of Search

Search denotes an action of a Government machinery to go, look through or examine carefully a place, area, person, object etc. in order to find something which is concealed or for the purpose of discovering evidence of crime.

Search Warrant and its Contents

A search cannot be carried out without a search warrant. The search warrant is issued by an officer of the rank of Joint Commissioner or above. Below are the contents of search warrant:

1. Violation under the Act
2. The premises to be searched
3. Name and designation of person authorized to search
4. Name, designation and round seal of the issuing officer
5. Date and place of the issue
6. Serial number of the search warrant
7. Period of validity

Procedure to be followed during Search

1. Search cannot be carried out without a warrant issued by a proper officer and a lady officer should invariably accompany the search team to the residence.
2. The officers conducting the search should disclose their identity by showing their identity card to the person in charge of the premises.
3. The warrant must be shown to the person in charge of the premises and his/her signature must be taken on the warrant. Signature of two witnesses must also be taken on the warrant.
4. The search should be made in the presence of at least two independent witnesses of the locality or the inhabitants of another locality. The witnesses must be briefed about the purpose of the search. The witnesses should be personally searched before and after the search.
5. The proceedings of the search must be prepared on spot and the list of all goods, documents recovered and detained or seized must be prepared and annexed with the proceedings of the search.
6. Upon completion of search, the warrant accompanied by the report of outcome of search must be returned to the officer. Further the copy of the proceedings along with the annexure must be given to the person in charge of the premises.

Seizure of Goods

The term 'seizure' has not been specifically defined in GST. In legal parlance, seizure is the act of taking over something or someone by force through a legal process, such as the seizure of evidence found at the scene of a crime. It generally implies taking possession forcibly against the wishes of the owner.

Procedure for seizure

The proper officer will give an order of seizure in FORM GST INS-02.

What are the powers of the officer authorized to search?

The officer authorized to search will have the power to seal the door of the premises. He can also break open the door of any premises if access is denied. He can also break open any cupboard or box in which goods, books, documents etc. are suspected to be concealed.

What happens if it is not possible to seize the goods?

If it is not practicable to seize the goods, the proper officer will order the owner not to remove these goods without prior permission of the officer. The officer will issue an order of prohibition in FORM GST INS-03.

Procedure after Seizure

1. The seized goods can be released on a provisional basis, on execution of bond and furnishing the prescribed amount of security or on payment of applicable tax, interest and penalty.
2. If no notice has been issued within 6 months from the seizure of goods, then all the goods seized shall be returned. However, the time period can be further extended by another 6 months by Commissioner on the basis of sufficient cause.
3. If the goods are of perishable or hazardous nature or are depreciable in the value within the passage of time or there are constraints for storage, then the Government may notify that such goods shall be disposed of by the proper officer in the prescribed manner. Before disposal, inventory shall also be prepared for such goods.

Also Read: Scrutiny under GST