INSPECTION, SEARCH, SEIZURE AND ARREST
67. Power of inspection, search and seizure
(1) Where the proper officer, not below the rank of Joint
Commissioner, has reasons to believe that––
(a) a taxable person has suppressed any transaction relating to
supply of goods or services 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 this Act or the
rules made thereunder to evade tax under this Act ; or
(b) 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 this Act, he may authorise in writing any other officer of State tax to inspect 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) Where the proper officer, not below the rank of Joint Commissioner,
either pursuant to an inspection carried out under sub-section ( 1) or
otherwise, has 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, he may
authorise in writing any other officer of State tax to search and seize or may
himself search and seize such goods, documents or books or things :
Provided that where it is not practicable to seize any such goods, the
proper officer, or any officer authorised by him, may serve on the owner or
the custodian of the goods an order that he shall not remove, part with, or
otherwise deal with the goods except with the previous permission of such
officer :
Provided further that the documents or books or things so seized shall
be retained by such officer only for so long as may be necessary for their
examination and for any inquiry or proceedings under this Act.
(3) The documents, books or things referred to in sub-section (2) or any
other documents, books or things produced by a taxable person or any other
person, which have not been relied upon for the issue of notice under this
Act or the rules made thereunder, shall be returned to such person within a
period not exceeding thirty days of the issue of the said notice.
(4) The officer authorised under sub-section (2) shall have the power 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, where access to such
premises, almirah, electronic devices, box or receptacle is denied.
(5) The person from whose custody any documents are seized under
sub-section (2) shall be entitled to make copies thereof or take extracts
therefrom in the presence of an authorised officer at such place and time as
such officer may indicate in this behalf except where making such copies or
taking such extracts may, in the opinion of the proper officer, prejudicially
affect the investigation.
(6) The goods so seized under sub-section (2) shall be released, on a
provisional basis, upon execution of a bond and furnishing of a security, in
such manner and of such quantum, respectively, as may be prescribed or on
payment of applicable tax, interest and penalty payable, as the case may be.
(7) Where any goods are seized under sub-section (2) and no notice in
respect thereof 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 :
Provided that 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.
(8) The Government may, having regard to the perishable or hazardous
nature of any goods, depreciation in the value of the goods with the passage
of time, constraints of storage space for the goods or any other relevant
considerations, by notification, specify the goods or class of goods which shall,
as soon as may be after its seizure under sub-section (2), be disposed of by the
proper officer in such manner as may be prescribed.
(9) Where any goods, being goods specified under sub-section (8), have
been seized by a proper officer, or any officer authorised by him under subsection (2), he shall prepare an inventory of such goods in such manner as
may be prescribed.
(10) The provisions of the Code of Criminal Procedure, 1973(2 of 1974), relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that sub-section (5) of section 165 of the said Code shall have effect as if for the word “Magistrate”, wherever it occurs, the word “Commissioner” were substituted.
(11) Where the proper officer has reasons to believe that any person
has evaded or is attempting to evade the payment of any tax, he may, for
reasons to be recorded in writing, seize the accounts, registers or documents
of such person produced before him and shall grant a receipt for the same,
and shall retain the same for so long as may be necessary in connection with
any proceedings under this Act or the rules made thereunder for prosecution.
(12) The Commissioner or an officer authorised by him may cause
purchase of any goods or services or both by any person authorised by him
from the business premises of any taxable person, to check the issue of tax
invoices or bills of supply by such taxable person, and on return of goods so
purchased by such officer, such taxable person or any person in charge of the
business premises shall refund the amount so paid towards the goods after
cancelling any tax invoice or bill of supply issued earlier.
68. Inspection of goods in movement
(1) The Government may require the person in charge of a
conveyance carrying any consignment of goods of value exceeding such amount
as may be specified to carry with him such documents and such devices as
may be prescribed.
(2) The details of documents required to be carried under sub-section (1)
shall be validated in such manner as may be prescribed.
(3) Where any conveyance referred to in sub-section (1) is intercepted
by the proper officer at any place, he may require the person in charge of the
said conveyance to produce the documents prescribed under the said subsection and devices for verification, and the said person shall be liable to
produce the documents and devices and also allow the inspection of goods.
69. Power to arrest
(1) Where the Commissioner has reasons to believe that person
has committed any offence specified in clause (a) or clause (b) or clause (c) or
clause (d) of sub-section (1) of section 132 which is punishable under clause
(i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by
order, authorise any officer of State tax to arrest such person.
(2) Where a person is arrested under sub-section (1) for an offence
specified under sub-section (5) of section 132, the officer authorised to arrest
the person shall inform such person of the grounds of arrest and produce
him before a Magistrate within twenty four hours.
(3) Subject to the provisions of the Code of Criminal Procedure, 1973(2 of 1974),—
(a) where a person is arrested under sub-section (1) for any offence
specified under sub-section (4) of section 132, he shall be admitted to
bail or in default of bail, forwarded to the custody of the Magistrate ;
(b) in the case of a non-cognizable and bailable offence, the Deputy
Commissioner or the Assistant Commissioner shall, for the purpose of
releasing an arrested person on bail or otherwise, have the same powers
and be subject to the same provisions as an officer-in-charge of a police
station.
70. Power to summon
(1) The proper officer under this Act shall have power to summon
any person whose attendance he considers necessary either to give evidence
or to produce a document or any other thing in any inquiry in the same manner,
as provided in the case of a civil court under the provisions of the Code of
Civil Procedure, 1908(5 of 1908).
(2) Every such inquiry referred to in sub-section (1) shall be deemed to
be a “judicial proceedings” within the meaning of section 193 and section 228
of the Indian Penal Code (45 of1860).
71. persons to give evidence and produce documents
(1) Any officer under this Act, authorised by the proper officer not
below the rank of Joint Commissioner, shall have 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.
(2) Every person in charge of place referred to in sub-section (1) shall,
on demand, make available to the officer authorised under sub-section (1) or
the audit party deputed by the proper officer or a cost accountant or chartered
accountant nominated under section 66––
(i) such records as prepared or maintained by the registered person
and declared to the proper officer in such manner as may be prescribed ;
(ii) trial balance or its equivalent ;
(iii) statements of annual financial accounts, duly audited, wherever
required ;
(iv) cost audit report, if any, under section 148 of the Companies
Act, 2013 (18 of2013);
(v) the income-tax audit report, if any, under section 44AB of the
Income-tax Act, 1961(43 of 1961.) ; and
(vi) any other relevant record,
for the scrutiny by the officer or audit party or the chartered accountant or cost accountant within a period not exceeding fifteen working days from the
day when such demand is made, or such further period as may be allowed by
the said officer or the audit party or the chartered accountant or cost
accountant.
72. Officers to Assist proper officers
(1) All officers of Police, Railways, Customs, and those officers
engaged in the collection of land revenue, including village officers, officers
of central tax and officers of the Union territory tax shall assist the proper
officers in the implementation of this Act.
(2) The Government may, by notification, empower and require any other
class of officers to assist the proper officers in the implementation of this Act
when called upon to do so by the Commissioner.
