Section 67 of CGST Act, 2017 : Section 67: Power Of Inspection, Search And Seizure

Explanation using Example

Imagine a scenario where the Joint Commissioner of Central Goods and Services Tax (CGST) receives information that a certain business owner, Mr. Gupta, has been underreporting his sales to evade GST. The Joint Commissioner believes that Mr. Gupta has been involved in:

• Not recording all transactions of goods sold,
• Claiming higher input tax credits than he is entitled to, and
• Violating other provisions of the CGST Act to evade tax.

Based on these beliefs, the Joint Commissioner authorizes a team of tax officers to inspect Mr. Gupta's business premises. During the inspection, the officers find unaccounted stock and suspicious documents suggesting tax evasion.

As a result, the Joint Commissioner issues a written authorization to seize the goods and documents. The officers seal Mr. Gupta's warehouse to prevent tampering with the evidence. They also seize electronic devices containing business records. Mr. Gupta is allowed to make copies of the seized documents under the officers' supervision.

Mr. Gupta is informed that the seized goods can be released provisionally if he executes a bond and furnishes a security, or pays the applicable tax, interest, and penalty. He is also told that if a notice regarding the seized goods is not issued within six months, the goods will be returned to him.

If Mr. Gupta's goods are perishable, the CGST department may dispose of them quickly to prevent loss of value, following the procedures prescribed by the government.