Bharat’s G S T Inspection, Search & Seizure by CA. (Dr.) Sanjiv Agarwal

Though GST in India shall be completing seven years on 1st July 2024, there is a lot of scope for different interpretation and litigation between the taxpayers and revenue authorities. The tax administration is now able to trace and track transactions and catch hold of tax evaders and punish them.

In any tax administration, the provisions for Inspection, Search, Seizure and Arrest are provided to protect the interest of genuine taxpayers (as the tax evaders, by evading the tax, get an unfair advantage over the genuine taxpayers) and as a deterrent for tax evasion. These provisions are also required to safeguard Government’s legitimate dues. Thus, these provisions act as a deterrent and by checking evasion provide a level playing field to genuine taxpayers.

It may be mentioned that the options of Inspection, Search, Seizure and Arrest are exercised, only in exceptional circumstances and as a last resort, to protect the Government Revenue. Therefore, to ensure that these provisions are used properly, effectively and the rights of taxpayers are also protected, it is stipulated that Inspection, Search or Seizure can only be carried out when an officer, of the rank of Joint Commissioner or above, has reasons to believe the existence of such exceptional circumstances. In such cases the Joint Commissioner may authorise, in writing, any other officer to cause inspection, search and seizure. However, in case of arrests the same can be carried out only where the person is accused of offences specified for this purpose and the tax amount involved is more than specified limit. Further, the arrests under GST Act can be made only under authorisation from the Commissioner. The circumstances which may warrant exercise of these options are as follows: —

      (i)   Inspection

     (ii)   Inspection in movement

    (iii)   Search & Seizure

    (iv)   Arrests